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Consumer Confidential: Drugmakers see disaster in Medicare negotiating prices. Don't listen to them

David Lazarus, Los Angeles Times on

Published in Business News

That's not to say Medicare should be empowered to push drug prices so low that pharmaceutical companies are no longer profitable, Basu added.

"The important thing is to structure the negotiations so they are fair to everyone," he said. "Again, this is how other countries do it."

According to the nonpartisan Congressional Budget Office, the Democratic bill, if enacted, would save the government more than $450 billion over 10 years by allowing Medicare to seek fairer rates.

The average cost of drugs could be reduced by as much as 50%, the CBO estimated.

Faced with this possibility, the U.S. drug industry has gone into full Chicken Little mode.

The industry's lobbying arm, Pharmaceutical Research and Manufacturers of America, says U.S. patients would have less access to drugs under Medicare pricing, and innovation would suffer.

 

Stephen J. Ubl, the head of PhRMA, called the pending legislation "a smokescreen" for giving the government control over prescription medicines.

To bolster its case, the industry group shared quotes from top pharmaceutical execs warning of dire consequences if Medicare gained a seat at the bargaining table.

"We cannot and will not support policies that hurt patient access," declared Dave Ricks, chief executive of Eli Lilly, one of three drug companies that have kept insulin prices at obscenely high levels for years.

"We will do significantly less research," predicted Ken Frazier, CEO of Merck, manufacturer of the up to $20,000-a-dose cancer drug Keytruda.

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