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WASHINGTON — Executives for the brand drug industry’s biggest lobbying group painted a grim picture for the future of drug development under Medicare price negotiation. But others say the sector is fearmongering.

Medicare last month provided details for how it will choose which drugs will be subject to price negotiation, and how it will calculate the government’s opening offers.


Executives at the Pharmaceutical Research and Manufacturers of America on Wednesday railed against both the substance and process of that initial guidance. They worried that Medicare officials would pay only the cost of manufacturing drugs, plus a small profit margin, even though the program guidance rejects using the unit cost of production as the starting point in price negotiations. They also warned that the program will discourage the development of drugs for cardiovascular disease, mental health and cancer, and argued that the new law discourages companies from improving upon existing drugs.

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