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WASHINGTON —The drug industry’s storied lobbying group isn’t accustomed to bad news — and with its small army of well-connected advocates, it’s even less familiar with surprises.

For PhRMA, the news last winter was both.


On Feb. 7, the group’s board — made up of dozens of the CEOs of major pharmaceutical companies including Amgen, Johnson & Johnson, and Sanofi — was gathered for a meeting to welcome its new chairman. Suddenly, the gathered crew had something far more threatening to discuss: Congress had just laid out a plan to force drug makers to pay far more into Medicare — a policy change none of pharma’s lobbyists had seen coming.

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  • Blaming Pharma for high prices is not 100% correct. The PBM industry with their deceptive practices need to be reviewed and close oversight initiated. Their mandated rebates to PhARMA should be eliminated and then PhARMA could lower their pricing by 40% without affecting PhARMAs bottom line. PBMs power must be controlled.

  • I’m very excited to hear this, as yes I’d expected Pharma to succeed. The details you recount — and which I had no idea about though I was aware of the measure — are fascinating. This makes me so happy! (tentatively, as you note, what happens in the future in uncertain)

    Great to see them stymied for once! Thanks for this fantastic coverage.

    • Agree with Rob. Reducing the price actually lengthens how long they have to pay the discount in the donut hole for beneficiaries on their drug that end up there. For very expensive drugs that get a beneficiary into the catastrophic phase very quickly, the discount is actually relatively modest (they are only required to provide the discount for a distinct phase, not for the entire cost of the drug). I think the policy will lead to more drug price inflation, not less. The only way to tamp down on that perverse incentive in my opinion is to require manufacturer discounts in the catastrophic phase.

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