PhRMA takes issue with drug-rebate proposal

Jordan Melnick — Wed, 29 Jul 2009 19:36:54 +0000

The Pharmaceutical Research and Manufacturers of America (PhRMA) cited “serious concerns” over a House proposal to have drug companies pay a rebate on certain medications provided under Medicare.

From the Wall Street Journal:

Under the proposed rebates, drug makers would pay back to the government some of the difference between higher prices charged for medicine under Medicare and the lower prices that are charged under Medicaid. In 2006, low-income seniors covered by Medicaid were moved into Medicare, which provides health care for the elderly.

While PhRMA – and by extension Big Pharma – has generally supported health care reform to date (a historic about-face) questions remain over how the trade association would use its sway to shape a final bill. And that sway is considerable: PhRMA has spent more than $13 million lobbying Congress this year, according to the Center for Responsive Politics.

In a statement Wednesday, PhRMA Senior Vice President Ken Johnson said:

The provision will constitute a tax increase on Part D beneficiaries because of resulting premium increases projected by the Congressional Budget Office (CBO) under a similar proposal.

Also in the statement – an updated version of a July 22 release – Johnson called for “well-designed” comparative-effectiveness research (CER), which would study comparable treatments. Under a public health care plan, the research could be used to determine which drugs the government offers based on cost and effectiveness. Pharma opposes binding CER, as Johnson’s statement suggests:

We believe sound policy is needed to support a long-term, credible, patient-centered program for comparative clinical effectiveness research that empowers patients and doctors with good information while avoiding restrictions on patient access to optimal care.

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PhRMA takes issue with drug-rebate proposal