AARP squares off against PhRMA over drug price lobbying

WHAT'S HAPPENING

A battle is being fought over Medicare Part D prescription drug costs for seniors who reach the maximum spend and must pay out-of-pocket to cover the gap known as the donut hole -- and the main players are the Pharmaceutical Research and Manufacturers of America, or PhRMA, and the AARP.

WHY THIS MATTERS

The Bipartisan Budget Act of 2018 increased the amount to be paid by drug manufacturers to cover the gap from 50 to 75 percent, starting in 2019. 

The current law saves AARP's 38 million members billions of dollars in out-of-pocket costs on their prescription medication by moving them through the drug coverage gap faster, which results in lower copayments, according to AARP. 

THE BIGGER TREND

Big pharma has the biggest lobbying spend in Washington, about $240 million a year, according to John Sculley, chief marketing officer for RxAdvance and former CEO of Apple. 

Legislators have been making a stab at addressing high drug costs and when he first took office, President Trump talked about wanting Medicare to start using its purchasing power on prescription drugs by negotiating directly with drugmakers. Congress-watchers said it would never happen, Sculley said, and nothing did.

Adding another twist to the plot, Politico reported on Monday that the office of House Minority Leader Nancy Pelosi said Republicans changed course on the so-called "Part D PhRMA bailout," though as of press time Republicans had yet to confirm that. 

THEIR TAKES

"AARP strongly opposes PhRMA's attempts to cut a backroom deal with Congress and reverse the Medicare Part D doughnut hole improvements enacted earlier this year that put drugmakers on the hook for a higher share of Medicare drug costs," said Nancy LeaMond, AARP executive vice president and chief advocacy & engagement officer. "Any change to the current law will simply be a windfall for the pharmaceutical industry that will only raise seniors' drug costs."

PhRMA said by statement that changes to Part D jeopardize drug company's competitive structures by lowering insurers' payment responsibility for brand medicines to 5 percent of costs in the donut hole. "This undermines Part D's market-based structure by reducing insurance plans' stake in the program and therefore reducing their incentive to manage program costs, while also creating a significant imbalance in payment responsibility," the group said.  

OUR TAKES

It's very difficult to pass legislation that cuts into big pharma's profits. 

And with prescription drugs considered one of the main culprits for skyrocketing healthcare costs, a win for the pharmaceutical industry sends a signal not to expect much to change -- despite House and Senate committee members holding numerous hearings to look at the issue.