Big Pharma turned the U.S. into the world’s most lucrative market by rigging the system. For 20 years they denied our government the ability to negotiate drug costs.
Then Congress gave Medicare the power to negotiate medicine prices.
So Pharma is launching a legal war.
How did we get here?
In 2003, drug prices were rising and Medicare didn’t really cover prescription drugs. Some lawmakers were pushing to change that, but the bill was stalled in the House.
Republicans believed that the bill would be too costly. Democrats said the whole thing was an industry handout.
So, to break the gridlock, the pharmaceutical industry started throwing around a bunch of money.
A Republican congressman inserted language into the bill barring Medicare from negotiating prices, despite the fact that the bill would make Medicare the largest purchaser of drugs in the world.
Then the Bush administration stepped with a foolproof strategy to convince hold-outs in Congress: just lie.
The head of Medicare told his staff that if they told the truth about the cost, they would be fired.
The plan became law, and dozens of elected officials and staff went on to work for the pharmaceutical industry.
How it works today
Now, Medicare is spending more and more on prescription drugs each year.
Peter Maburduck, head of the Access to Medicines Program at Public Citizen, points to Medicare’s inability to negotiate drug prices as the cause.
“People in the United States are paying more than all people in all other countries of the world put together,” Maburduck told us. “And it’s because we don’t negotiate price.”
That’s finally starting to change.
Last year, through the Inflation Reduction Act, the Democrats finally gave Medicare the ability to negotiate the prices of ten drugs. Those ten drugs make up around 20 percent of the program’s total cost.
By the end of the decade, the law will expand to 60 drugs.
The industry reaction
Unsurprisingly, the pharmaceutical industry has launched a legal war to keep drug prices high.
There are now almost ten lawsuits from drug companies and lobbyists aimed to block Medicare’s new negotiation powers.
Most legal experts say that the lawsuits are a stretch—but there is a real concern that the lawsuits might work.
What the industry is looking for is a circuit split, when two or more judges rule differently on the same issue, making it much more likely for the Supreme Court to hear the case and resolve the issue.
It’s hard to speculate how this will turn out. This is a fight that has been going on for decades. The pharmaceutical industry wins most of the time, but the Democrats delivered a rare victory. And now it might be in jeopardy.
“It’s important to understand that the industry has more than two lobbyists for every member of Congress,” Maburduck said. “So it’s important collectively that we fight back and turn that aggressiveness back against pharma and say, ‘actually, you know what? The American people think negotiating is very reasonable and fair pricing is essential.’”
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