Expert says HR 3 won’t inhibit pharmaceutical innovation in So-Cal, contradicting claims from PhRMA


Eli Kirshbaum


A federal bill that would allow Medicare to negotiate prescription drug prices is failing to progress because several congressional representatives from areas with robust pharmaceutical industries remain opposed. This includes representatives from the San Diego and Los Angeles areas — Democratic U.S. Reps. Scott Peters, Lou Correa, and Tony Cardenas are opposed to the initiative.

Congressional Democrats are hoping to include the bill’s provisions in upcoming budget reconciliation legislation. The “Elijah E. Cummings Lower Drug Costs Now Act,” or HR 3, was introduced in April for the second year in a row, after passing the House last year but halting in the then-Republican-controlled Senate.


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In a May letter addressed to House Speaker Nancy Pelosi — a leader of the effort — these three and several other members of the House highlighted the pharmaceutical industry’s concerns that HR 3 would stifle innovation in the prescription drug market. While supportive of lowering drug costs, the signatories said Congress needs to also “preserve our invaluable innovation ecosystem.”

Tim Lash, president of the West Health Policy Center at West Health, believes the bill would “have a profound impact on … families across the country.” Lash previously worked in the biopharmaceutical industry for over 10 years.

During a webinar hosted by Protect Our Care California on Wednesday to discuss research surrounding HR 3, Lash said the majority of Americans from both parties support allowing Medicare to negotiate drug prices.

“That’s creating some tailwinds, and action could be on the horizon.” 

A study from West Health and Gallup showed a majority of Americans support allowing Medicare to negotiate these prices to lower costs for patients.


Image: Gallup


A working paper from the Congressional Budget Office (CBO) concluded the bill would have no impact on the number of new drugs that are launched. CBO also predicted HR 3 would result in a 57-75% decrease in prescription drug costs.

Last week, President Biden called on Congress to pass HR 3 and emphasized his support for Medicare price negotiation. He highlighted the severity of high prescription drug prices in the U.S. and explained how negotiation would work.

“What we’re proposing is that we’ll negotiate a base. We’ll negotiate with the company based on a fair price — one that reflects the costs of the research and development and the need for providing for a significant profit, but that’s still affordable for consumers.”

The initiative is being met with resistance from the pharmaceutical industry, which says allowing Medicare to negotiate would stifle innovation in the market. In San Diego, where the industry has a significant presence, the industry is influencing the area’s representatives to oppose the measure. Peters, whose district is home to 300 pharmaceutical companies, has received nearly $90,000 in campaign donations from the pharmaceutical and health care industries in 2021 alone.

 In response to Biden’s remarks, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued a statement in opposition.

“…Unfortunately, the policies the president outlined today would undermine access to life-saving medicines and fail to address an insurance system that shifts the cost of treatments onto vulnerable patients. Many in Congress know that access to medicine is critical for millions of patients and Medicare is not a piggy bank to be raided to fund other, unrelated government programs. This is a misguided approach…”

Lash said the industry’s claims are “simply not true,” citing research from both the CBO and his own organization.

“Current proposals like HR 3, allowing Medicare to negotiate — assuming that pharmaceutical companies took some simple actions to redistribute where they allocated their [research and development] dollars — would have zero impact on the number of new drugs launched …

…Suggesting that the industry can’t bear any loss is just a farce.”