Pharma execs tell investors Medicare negotiations won’t have a big impact

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The Big Story 

Since the first offers in the Inflation Reduction Act’s Medicare negotiation program went out, high level executives at companies subject to the process have made light of the suggested prices and the impact they’ll have.

© AP

What they’re saying: AstraZeneca CEO Pascal Soriot told reporters last month that the initial offer from the Centers for Medicare and Medicaid (CMS) was “relatively encouraging,” while Pfizer CFO David Denton told investors that the impact from negotiations would be “modest.”

Far from cooling to the idea of negotiating the prices of their drugs, advocates see these comments as reassuring lip service to potentially anxious shareholders.

Merith Basey, executive director of the advocacy group Patients for Affordable Drugs, said, “We were expecting that they would come out and say something like this,” noting the pharmaceutical industry could afford to lose a significant amount in the cost of their drugs while still remaining profitable.

These recent comments contrast with what pharmaceutical lawyers have said in court, lamenting the serious harm companies have already begun to experience due to negotiations, a claim that several federal judges have been dubious of.

“Their counsel have to follow certain ethical guidelines to talk about the harm while also making sure to comfort investors on the other side to say, ‘Hey, don’t run away from this business and these opportunities. It’s not going to be as bad as you think,” Zachary Baron, director of the Health Policy and the Law Initiative at the O’Neill Institute, told The Hill.

While some drugmakers may not be anticipating extreme drops in price, at least when talking to investors, advocates stress that the impact on patients would still be immense.

“A few hundred dollars is a massive difference for one individual,” Basey said. “Again, this is about ordinary people.”

Welcome to The Hill’s Health Care newsletter, we’re Nathaniel Weixel and Joseph Choi — every week we follow the latest moves on how Washington impacts your health.

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