Drug Pricing Implications of the New Congressional Landscape

After the votes from the midterm elections were counted Tuesday and the Democrats had gained a majority in the US House of Representatives while Republicans reinvigorated their hold on the Senate, it was clear that a hot topic on voters’ minds was the high cost of drugs in the United States; however, questions remain as to what the newly elected officials will be able to accomplish to reduce prices.

Due to Congress being divided amongst the 2 parties, each group will struggle to move legislation without the other’s support. On Tuesday, House Minority Leader Nancy Pelosi, D-California, said that Democrats could work with President Trump to lower drug prices. “I think we could find common ground on reducing the cost of prescription drugs, if the president is serious about his saying that he wants to do that,” said Pelosi in an interview with PBS NewsHour.

Before the elections had taken place, the pharma industry saw potential gridlock in Congress as a positive that could benefit drug makers. However, as this is one issue that both sides of the aisle seem to agree on, Cowen Washington Research Group’s healthcare and pharma managing director Rick Weissenstein, noted that the election result could actually result in “a constant drumbeat of hearings and bad press,” as reported by FiercePharma. Because the House has subpoena powers, said Weissenstein, it could move to subpoena drug makers for research and development costs, launch investigations, and hold hearings, among other things.

Indeed, analysts are in agreement that the next 2 years could see a very healthcare-focused Congress. “With Democrats running key committees—including Elijah Cummings, D-Maryland, who has been focused on healthcare and who will now head the [Committee on Oversight and Government Reform]—we believe that drug prices and healthcare will stay a hot topic,” said Wells Fargo analyst David Maris, also reported by FiercePharma.

Also on the horizon is a potential push for the Medicare-for-all platform that many progressive Democrats ran on in the midterm elections. Yet to date, the Republican Trump administration has been looking to generate more transparency across the drug pricing process through efforts such as proposing to require drug makers to include a drug’s list price in direct-to-consumer advertising.

More recently, the administration has announced that it will be looking into using an International Pricing Index to more closely align its Medicare payment amount for selected Part B drugs with prices paid in other nations. CMS is taking comments on that proposal until December 31, 2018.