New drug price hikes set stage for 2020 fight

Price hikes on hundreds of prescription drugs to start the year are leading to intensifying calls for action from lawmakers and advocates, putting new pressure on Washington.

Drug companies kicked off the year by raising prices on a wide range of treatments by an average of about 5 percent, according to the consulting firm 3 Axis Advisors. 

“Enough is enough,” Speaker Nancy Pelosi (D-Calif.) tweeted, pointing to the hikes and calling on the Senate to pass her signature legislation to lower drug prices “now.”

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) also pointed to the increases to call for action on drug prices. 

Drug price hikes at the start of a new year are common, but the latest round followed a year in which lawmakers and the administration spoke optimistically about reining in higher prices. Congress, however, ultimately ended 2019 without any major legislation being enacted, to the frustration of advocates.

The latest move highlighted the power of the pharmaceutical industry. Pfizer, for example, which has been criticized harshly in the past by President Trump, raised prices on about 27 percent of its drugs by an average of 5.6 percent.

Companies note that the list prices of drugs are often well above what consumers pay at the pharmacy counter. But pharmaceutical companies, who are already under fire from both Congress and the administration, can expect more scrutiny, with the hikes certain to fuel the debate over costs in the 2020 election.

The drug hikes will be fodder for both parties, who have hammered pharmaceutical companies and those across the aisle.

Democrats have accused Trump of failing to follow through on his promises to address the issue, in particular attacking him for backing off a 2016 campaign pledge to support allowing Medicare to negotiate lower prices.  

In Congress, despite the bipartisan talk of lowering the cost of prescription medications, the prospects for anything actually being signed into law this year with an election ahead are decidedly murky, highlighting the deep divisions on the issue.

Republicans are fiercely opposed to Pelosi’s bill to allow the government to negotiate prices, calling it “socialist.” And even Grassley’s somewhat more modest proposal has drawn opposition from many Republican senators, who worry that a provision limiting Medicare drug price increases to the rate of inflation is a “price control.”

Pelosi and Grassley are pushing for a drug pricing package to pass attached to extensions for a range of expiring health programs, like funding for community health centers, ahead of a May 22 deadline. But it is unclear what a package that leadership in both parties can agree to would look like. 

Pelosi is still publicly pushing for the Senate to agree to her bill to allow the government to negotiate lower prices, hoping that Trump will return to his 2016 position once he is back on the campaign trail again, but it appears unlikely that bill can make it through the GOP Senate. 

It is unclear what kind of more-modest measure she would accept or Republicans might agree to. 

Advocates hope election year pressure spurs action, though. 

“This is an issue that the American people are paying attention to,” said David Mitchell, founder of the advocacy group Patients for Affordable Drugs Now. “They’re going to have a chance to speak their mind in early November, and they are going to be looking to see who did something to actually lower their drug prices.”

But Senate Majority Leader Mitch McConnell’s (R-Ky.) resistance to major drug pricing action so far has others pessimistic. 

“Mitch McConnell has made it extraordinarily clear that there is a zero percent chance that  something happens this year,” said Alex Lawson, executive director of the progressive group Social Security Works. 

Grassley himself last month accused McConnell, the leader of his party in the Senate, of blocking progress on his drug pricing bill. 

For his part, McConnell told Politico in September that the Senate is “looking at doing something on drug pricing” but has not elaborated on what that could entail.

Democratic presidential contenders, meanwhile, are hammering Trump for backing off his 2016 pledge to support negotiating lower prices. 

“After a lifetime of lying and cheating to enrich himself and his billionaire friends, Mr. Trump—shock of all shocks—has abandoned his campaign promise to have Medicare negotiate drug prices,” Sen. Bernie Sanders (I-Vt.) tweeted in November after the White House announced its opposition to Pelosi’s drug pricing bill. 

Polls show the issue is one that resonates with the public.

A Kaiser Family Foundation poll in October found an overwhelming 88 percent of the public supports giving Medicare the power to negotiate drug prices, including 85 percent of Republicans.  

“This is the issue that the American people are united on,” Lawson said. “Everyone hates pharma and high drug prices.”

Speaking of Democratic presidential candidates, he added, “I think they are going to run hard on it, and I think that is very smart.”