The Wall Street Journal Finds Pharma-Backed Provision Likely to Enable Big Drug
Companies to Keep Prices High on Blockbuster Products Not Included in Original
CBO Analysis





 



DOSE OF REALITY: REPORT FINDS BIG PHARMA RIDER IN TAX LAW LIKELY TO COST
SENIORS AND TAXPAYERS FAR MORE THAN PREVIOUSLY ESTIMATED

The Wall Street Journal Finds Pharma-Backed Provision Likely to Enable Big
Drug Companies to Keep Prices High on Blockbuster Products Not Included in
Original CBO Analysis



In case you missed it, The Wall Street Journal reported
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this week that a Big Pharma-supported policy, included in recently passed tax
legislation, is likely to cost seniors and taxpayers far more than previously
estimated.



Big Pharma’s rider in the package was based on a bill called “The Optimizing
Research Progress Hope And New (ORPHAN) Cures Act.” While purportedly meant to
protect and foster pharmaceutical innovation, this misguided legislation would
help brand name drug manufacturers keep prices high on a whole category of
their products.



The nonpartisan Congressional Budget Office (CBO) previously estimated this
pharma-backed policy would cost seniors and taxpayers $4.8 billion in higher
prescription drug spending.



But according to The Wall Street Journal, “The true tally of the new
provisions could be far higher because CBO missed certain drugs such as
Keytruda. The office plans to re-evaluate its analysis.”



Keytruda, which generated $8 billion in sales for its manufacturer Merck in
the second quarter of this year alone, provides a case study in Big Pharma’s
egregious pricing and anti-competitive practices. Already patent-protected in
the U.S. until 2028, Merck is working to further extend monopoly pricing and
undermine competition from more affordable alternatives beyond 2028, by seeking
a new formulation and additional patents. At the J.P. Morgan Healthcare
Conference in January 2025, Merck CEO Rob Davissaid
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the brand name drug company is “moving up plans to file for approval and
launch a subcutaneous version of Keytruda by the end of 2025.”



According to research
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from I-MAK, Merck has filed for 129 patent applications on Keytruda – more
than half of which were filed after the drug’s initial approval by the U.S.
Food and Drug Administration (FDA). The Big Pharma company has been granted 53
patents on this one drug. I-MAK estimates that Americans will spend at least
$137 billion on Keytruda while the drug faces no competition due to its
extended exclusivity that already totals more than eight years — without
reflecting the added impact of the Big Pharma giant’s new patent strategy.



The Journal also identifies Johnson and Johnson product “Darzalex, a melanoma
treatment, estimated to have had $5.6 billion in gross Medicare spending last
year… Bristol-Myers Squibb’s cancer drugs Opdivo and Yervoy, which are
estimated to have cost Medicare $4.7 billion and $993 million, respectively, in
2024… [and] AbbVie’s blood-cancer pill Venclexta, estimated to have had $814
million in gross Medicare spending in 2024,” as additional blockbuster brand
name medications that would become exempt from solutions designed to lower drug
prices for seniors and taxpayers under the provisions.



So, it’s no wonder Big Pharma was working overtime to add this rider into the
recently passed package, while the full extent of its cost wasn’t yet fully
known.



“The drug industry had long been pushing to include the provisions in the new
law,” The Journal reports. “Dozens of companies, including Merck and
AstraZeneca, as well as industry groups such as the Pharmaceutical Research and
Manufacturers of America and the Biotechnology Innovation Organization, lobbied
lawmakers on the provisions in the first half of the year, according to data
from OpenSecrets.org, a nonprofit that tracks lobbying and campaign finance.”



As the full impact of Big Pharma's loophole for high-priced blockbuster drugs
comes to light, Congress should act to protect seniors and taxpayers from
billions of dollars in higher prescription drug prices by repealing these
harmful provisions.



Read the full report in The Wall Street Journal HERE
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.



Read more on the pharma-backed ORPHAN Cures Act HERE
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.



Read more on how Big Pharma’s innovation arguments don’t hold up to scrutiny
HERE <[link removed]> and HERE
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.



Read more on bipartisan, market-based solutions to hold Big Pharma accountable
HERE
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.



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