Bidenomics Backfires in War on Big Pharma

President Joe Biden and his administration have repeatedly declared victory in the war on Big Pharma. Under the Inflation Reduction Act, Medicare can directly negotiate lower drug prices for about a dozen pharmaceuticals, such as Januvia (diabetes), Imbruvica (blood cancers), Entresto (heart failure), and many more. While the president touts his achievements, the proposals have already triggered a series of unintended consequences that could hurt US consumers.

The War on Big Pharma

The chief purpose behind President Biden's war on Big Pharma was to lower costs for the American people. Instead, the White House's efforts could do the opposite, as drugmakers intend to raise prices for hundreds of medicines while potentially delaying the creation of certain life-saving pharmaceuticals.

Reuters published an exclusive report that found Pfizer, Sanofi, and Takeda Pharmaceutical plan to boost the US price tag for more than 500 drugs in January. The latest move is in response to the industry agreeing to negotiate discounts on ten high-cost drugs this past fall while also contending with high inflation, bloated manufacturing costs, and potential supply disruptions amid the conflict in the Middle East. In other words, while these companies are trimming prices for certain products, they are making other drugs more expensive to make up the difference.

Several other firms are reportedly delaying in-demand medicines to evade Biden’s new pricing scheme.

Roche Holding AG and Alnylam Pharmaceuticals are two entities postponing therapies, suspending clinical trials, and adjusting timelines. For example, Roche has produced a pill for treating ovarian cancer. It was in the process of studies, but the corporation will not seek approval for the drug right now, meaning it would not be available to fight ovarian cancer for at least three more years. Or, as another instance, Alnylam was about to study Amvuttra to treat Stargardt disease, a rare cause of vision loss. It was approved for treatment. The problem? The Inflation Reduction Act exempts drugs that treat one rare disease from price negotiations, but pharmaceuticals that treat two or more are still eligible.

Seagen, a firm recently acquired by Pfizer, halted research on treating a type of bladder cancer with one of its leading drugs, Padcev, due to coming price deliberations with the US government. The business is instead mulling over a comparable drug for the same kind of cancer despite being in an earlier stage of study. Ultimately, it could be three more years before it is available to patients.

President Biden recently suggested that his administration revoke drug licenses and seize patents of medicines that it arbitrarily determines to be too expensive. Officials say the president possesses the power, citing a 1980 law that permits the government to take a firm's patent if it does not extend products to the public that taxpayer funds helped develop. Experts immediately sounded the alarm, warning that it would prevent the creation of advanced medications and undermine intellectual property rights in the United States. Biden proposed a similar policy in 2021 regarding the coronavirus vaccines.

Biden's campaign against Big Pharma could have disastrous consequences for patients, from higher prices to a lack of supply. Plus, despite routinely claiming the White House accomplished something, medicinal drugs are up 5% year-over-year. According to the November consumer price index, prescription and non-prescription drugs have climbed at an annualized pace of 3.8% and 7.8%, respectively.

The 2024 Election

It is an election year, and the polling indicates most people detest inflation. Many individuals also loathe drug companies. Strategically, it makes sense for an unpopular president to target Big Pharma, although the US government will abstain from removing COVID-19 vaccine makers’ total immunity from liability, of course. The incumbent must look like he is doing something to rein in drugmakers’ exorbitant prices. Like every intervention by the state, these actions will breed unintended consequences. The present regime asserts it is doing everything possible to shield consumers from greedy corporations. But eminent economist Milton Friedman may have been right when he wrote, "A much more urgent problem is to protect the consumer from the government."