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Utah Life Sciences News & Events

Senate Democrats Push Drug Pricing, Tax, Climate Package

July 28, 2022

Sen. Joe Manchin (D-W. Va.) on Wednesday said he had signed off on a revised “Build Back Better” plan, renamed the “Inflation Reduction Act of 2022,” which includes sweeping drug price controls along with tax increases and billions for climate and energy spending.

The bill’s drug pricing provisions would allow Medicare to negotiate drug prices with pharmaceutical companies, effectively government regulation of prices. Drug companies would also be required to pay a rebate to Medicare if the price of a drug increased faster than the rate of inflation. No reforms to the practices of pharmacy benefit managers have been added. Although the White House suggests these policies will help fight inflation, the Bureau of Labor Statistics reports that the overall consumer price index increased 9.1 percent over the last year while the index for drug prices grew 2.5 percent.

New studies by Avalere and Vital Transformation continue to show that these drug pricing provisions would severely curtail R&D and result in far fewer innovative drugs coming to market. Avalere finds that manufacturer revenue would fall by $450B. According to the Vital Transformation analysis, if these drug price controls had been enacted during the last decade, only 6 of 110 currently approved therapies would have made it to patients.

BioUtah has joined its fellow state BIO associations in sending a letter to Congress expressing strong concerns about this approach to addressing drug costs.

While Manchin is on board, Sen. Kyrsten Sinema (R-AZ), a hold-out on a previous massive  tax and spending package, has not yet indicated her position. Passing the bill with a simple majority under the reconciliation process requires the support of all 50 Democrat Senators.