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Pharma is gearing up to continue the fight as the drug price bill is passed in the House

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The pharmaceutical industry is poised to minimize the impact of major drug legislation passed by Congress on Friday, the first time in years that lawmakers have overcome the drug lobby’s opposition to limits on their pricing power.

On Friday, the House of Representatives passed the Inflation Reduction Act in a party-line vote of 220-207, sending the bill to President Joe Biden for his signature this week.

“Make no mistake. These actions are a huge blow to pharma, which has been strangled for decades, preventing us from taking this action,” House Speaker Nancy Pelosi, D-Calif., said in a speech on the floor. “Now, we’ve loosened that stranglehold a bit. There’s more to be done, but more leverage and more breathing room for American families.”

The bill would allow Medicare to negotiate prices for 60 drugs by 2029, starting with 10 in 2026. Drug manufacturers pay rebates for any Medicare drug price increases that exceed the rate of inflation, and Medicare patients’ monthly out-of-pocket insulin costs are capped at $35. However, legislative rules and Republican opposition prevented Democrats from applying those provisions to private insurance.

The pharma industry spent heavily lobbying against the bill, and after decades of blocking action to curtail the industry’s pricing power in the US, its main lobby group signaled the fight would continue.

“After months of legislative wrangling, we have a partisan, government-sponsored price-fixing bill that results in fewer treatments and cures and doesn’t do enough to make drugs more affordable for more Americans,” Stephen Ubl, CEO of drug lobby PhRMA, said in a statement. “We will continue to advocate for commonsense and bipartisan solutions because the American people deserve better.”

Before the House vote, Ubl threatened to go after lawmakers who supported the bill, noting to Politico that bills passed with slim partisan majorities “rarely stick.”

The pharma industry is likely to sue to challenge the law and try to influence the rulemaking process and challenge any resulting regulations in court, University of Washington law professor Rachel Sachs wrote in an analysis published by Health Affairs. Industry is likely to “game” the process, for example by creating limited competition for products that may be ineligible for price negotiations.

“The industry has engaged in a decades-long effort to identify strategies that allow its members to maintain their monopolies, including the establishment of patent thickets, pay-for-delay agreements, product hopping, restricted distribution networks and other tactics,” Sacks wrote. “It would be surprising if this behavior stopped with the enactment of drug price negotiation legislation. .”

Among the companies most exposed to price talks starting in 2026 are Bristol Myers Squibb, Pfizer, Amgen, Eli Lilly, AbbVie, GSK and Johnson & Johnson, Morgan Stanley analyst Terence Flynn wrote in a note to clients on Monday.

In response, pharma could launch products with higher initial prices in the US and rethink some drug investments or launch strategies, which could have a 4% negative impact on revenue in 2026, Flynn wrote. For the industry,” he wrote.

He noted that the Congressional Budget Office estimated in July that price negotiations would save $102 billion over the first six years. Annual drug spending in the US — the largest market for drugs — is expected to reach between $684 billion and $714 billion by 2026, according to IQVIA.

Industry CEOs recently warned that the bill could shift research dollars away from small molecule drugs, such as some cancer treatments.

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