Pharma Companies Campaign Against Cheaper Prescription Drugs
The National Association of Manufacturers has launched a six-figure advertising campaign to oppose the changes in law, proposed by Democrats, to reduce prescription drug costs, claiming cheaper prices are a tax on manufacturers that stifles innovation. The first advertisement in the campaign, "Price Controls: A Hidden Tax," argues that price controls are a hidden tax on drug manufacturers which will harm innovation and competitiveness by limiting research and development funding.
Eight out of 10 major drug manufacturers spend more on advertising than on research and development, according to the American Hospital Association. Pharmaceutical advertising is illegal in all but two countries: the United States and New Zealand.
The Congressional Budget Office (CBO), the non-partisan research arm of the United States Congress, says the changes are estimated to enable $288 billion in federal deficit reduction over a ten-year period. The CBO analysis also said that under current law, around 1,300 drugs will be approved over the next 30 years. If the changes proposed become law, CBO estimates the number of drugs released would reduce by around 15 over 30 years.
Democrats have proposed several changes in areas related to prescription drugs.
- Penalize drug manufacturers for price increases that outpace inflation;
- Enable Medicare to negotiate prices on select prescription drugs;
- Limit Medicare and commercial drug price growth to inflation;
- Cap out-of-pocket Medicare Part D drug costs to $2,000 per year;
- Make Part D vaccines available with no cost sharing; and
- Expand eligibility for the Part D Low Income Subsidy (LIS) program to individuals with incomes up to 10% of the federal poverty level (up from 135% of poverty level).
A six-figure advertising campaign is quite small compared to what the pharmaceutical industry spends on lobbying. In 2021, 565 clients spent $357,845,906 on lobbying, according to Open Secrets, which tracks money in politics. The second highest spending lobbying industry in 2021, electronics manufacturing, spent just over half of pharma, a total of $180,703,915.
In 2022, Open Secrets says 512 pharma clients spent $187,414,530 in just the first quarter of the year. Electronics and manufacturing spent $98,930,382 during the same period. The political action committees (PACs) representing the industry have spent an additional $12 million in campaign contributions in the 2022 election cycle, as of July 16.
Watch "Price Controls: A Hidden Tax," by The National Association of Manufacturers, below.