Leading US drugmakers have warned the Obama Administration that they will not accept any new moves to cut the prices of prescription drugs supplied through Medicare, stating that these would amount to government price controls.
The drugmakers expressed their concerns after Pres Obama signed the debt-ceiling deal earlier this month, which calls for further cuts in government spending to reduce the federal deficit by $1.5 trillion over the next 10 years. As part of this effort, leading Democrats in the House have said that they are revisiting plans originally put forward in 2005 to give the federal government authority to negotiate prices with drugmakers and introduce rebates on medicines supplied to so-called "dual-eligibles."
Dual-eligibles are the approximately 8.8 million Americans who qualify for both Medicare (the federal health programme for seniors and some disabled people) and Medicaid (the federal/state programme covering people on low incomes). Medicare currently pays more that Medicaid for prescription drugs for this group of beneficiaries.
President Barack Obama has stated his support for requiring drugmakers to provide new discounts on medicines supplied to dual-eligibles.
But Pfizer's chief executive, Ian Read, has said his firm would oppose any further changes to Medicare. "We made a contribution to the Affordable Care Act [the health reform legislation signed into law by Pres Obama early last year] that was substantial and fundamental," Mr Read told Bloomberg, adding that the pharmaceutical industry "represents only 10% of the health care spending in the US, and we are the most efficient part of that."
Bloomberg also reports Merck & Co as stating that it would "vigorously oppose any targeted, pharmaceutical industry-specific approach to federal revenues," while Eli Lilly says it will be monitoring any potential changes "to ensure that innovation is protected."
The industry points out that it contributed $112 billion under the ACA to the President's health reforms, but last month, during negotiations on the debt-limit ceiling, he had commented that while the ACA had made prescriptions more affordable and accessible for seniors: "there's more to potentially be done there."
Drugmakers are "still doing very well through the Medicare programme," said the President.
The Pharmaceutical Research and Manufacturers of America (PhRMA) had responded that it was "extremely unfortunate that Pres Obama continues to "push for a policy that could destabilise the successful Medicare Part D [prescription drug benefit] programme and have a devastating effect on American jobs."
"Government-imposed price controls in Part D could fundamentally alter the competitive nature of the programme and threaten its success," warned PhRMA vice president Karl Uhlendorf.
"Savings achieved in Part D are passed on to beneficiaries, contributing to the programme's success in holding costs far below projections, while achieving very high marks from seniors," he added.