Taxpayers and Seniors Would Lose Billions Under Big Pharma’s EPIC Act

Six of the 8 small molecule drugs currently undergoing Medicare price negotiation would have been excluded under drug industry-backed legislation, a new Public Citizen report finds.The Big Pharma-backed EPIC Act would give drug companies more years of monopoly pricing, gutting the historic 2022 law that for the first time ever empowered Medicare to prevent corporate price gouging and make medicines more affordable for Americans. Public Citizen’s report titled “EPIC Act Would Be A Multi-Billion Dollar Pharma Windfall At The Expense of Seniors” shows that the legislation would shrink the time negotiated prices are available for some drugs to only a very short time before generics are available and push many larger spend drugs out of negotiation entirely, costing taxpayers and seniors billions.

Key points of the report include:

• PhRMA’s longer negotiation delay period would gut Medicare negotiations. If EPIC were in place, drugs representing $11 billion in spending would have been excluded from price-cutting negotiations this year.
• Delaying price negotiations as called for under EPIC would result in some drugs never having a negotiated price, as generic competition would come on the market before or during the negotiation period. Other drugs would have just a year of a negotiated price.
• Most countries negotiate the prices of brand name drugs shortly after their launch. The IRA’s drug price negotiation efforts, while meaningful, are still far too generous to the drug industry. An overwhelming majority of Americans support Medicare negotiating prices for more drugs, not exempting more drugs from negotiation. Delay periods should be eliminated entirely.

“The latest group of small molecule drugs selected for Medicare’s price negotiation program highlights that pharma companies still get too many years of unlimited pricing power, not too little. If EPIC was implemented the pocketbooks and health of hundreds of thousands of Americans who struggle with cancer, HIV, depression, Alzheimer’s and schizophrenia would suffer at the expense of multi-billion and even trillion-dollar drug companies that have more than earned a fair return on investment on the medications at issue,” said Public Citizen Research Director Sarah Karlin-Smith, who authored the report. The “pill penalty” is nothing more than a pharma industry myth. “EPIC would gut Medicare price negotiations, by pushing many of the larger spend drugs out of negotiations entirely, collapsing the period between when drugs first become eligible for negotiation and when they become ineligible again through generic competition. While Big Pharma execs pad their profit margins, American patients — particularly vulnerable seniors — will suffer.”