August 14, 2024

First round of Medicare Drug Price Negotiations Promising Steps against Pharma Profiteering

WASHINGTON D.C. - The White House is expected to announce savings from the first year of Medicare price negotiations under the Inflation Reduction Act.

Public Citizen Access to Medicines Director Peter Maybarduk applauds these initial steps towards better protections of American patients.

"This is a major achievement. At last and over Big Pharma's pernicious, hand-wringing opposition, Medicare has negotiated drug prices, promising long-overdue savings for American taxpayers," said Maybarduk.

In January, Public Citizen released an 18-page report describing how pharmaceutical companies continue to insulate themselves against policies that counter their incessant acts of profiteering. According to the report, pharma giants often claim regulating drug prices will reduce their capacity to invest in the research and development of new medicines. But that claim holds little weight as corporations' own expenditures on self-enriching activities, including stock buybacks, dividends to shareholders and executive compensation, far exceed their investments in innovation.

Medicare negotiation is especially needed, Maybarduk said, because "drugmakers played patent games to extend the monopolies of nearly all drugs chosen for negotiation, costing Medicare billions of dollars. For example, according to Public Citizen's analysis, Amgen's gaming of Enbrel cost Medicare more than a billion dollars in just four years. Ambitious price negotiation is a way to start taking back for Americans what prescription drug corporations unfairly took."

An upcoming Public Citizen report will further outline how "evergreening abuses" (patenting tactics designed to unfairly lengthen monopoly protections on the drugs) ensure pharmaceutical companies keep drug costs high for American patients. The report shows several drugs subject to negotiation would likely have faced competition before negotiated prices go into effect were it not for evergreening tactics, and as a result, Medicare will lose over billions dollars in savings that should have accrued from access to competing, lower-cost treatments.