FACT CHECK: PhRMA’s Part B Spin is Full of Falsehoods

WASHINGTON, D.C. — Big Pharma is at it again. On Wednesday, the drug lobby will roll out its objections to the proposed HHS Part B Demonstration. During a media briefing at its Washington headquarters, PhRMA is sure to pull out all the tired scare tactics: “socialized medicine,” ‘‘reducing access,” “interference in the doctor/patient relationship,” “rationing,” and other well-worn claims from its playbook.

Here are three questions for PhRMA and a fact check ahead of the media briefing:

3 Questions for PhRMA

  1. Since the only way patients would receive worse care is if drug companies withhold drugs from Medicare, are PhRMA member companies willing to withhold drugs while being paid 126 percent more than other countries?

  2. What are two proposals PhRMA supports to lower the list price of drugs? Not PBM reform or Medicare policy changes. How is PhRMA willing to lower drug prices, since drug companies collect 66 percent of Part D drug spending and an even higher share of Part B spending?

  3. If high prices are necessary for quality care, how does PhRMA account for thesuperior outcomes and life expectancy in international countries despite lower prices for prescription drugs?

FACT CHECK: PhRMA’s False Claims About the Medicare Part B

MYTH #1: The Part B demonstration will restrict access to lifesaving drugs.

  • Americans ration drugs today based on price.

    • NPR: “Insulin's high cost leads to lethal rationing.”

    • Vox: “It means that our system, even if we don't like to admit it, has to pick and choose who gets access to lifesaving drugs.”

  • There is no evidence the Part B demonstration would harm patient access to drugs unless drug corporations choose to withhold drugs from patients

    • HHS: The proposal is to “lower drug prices—without any restrictions on patient access.”

  • All protected classes of drugs in Medicare will be maintained.

    • HHS: “We propose no changes to the Medicare benefit, just more discounts from drug companies.”

    • Bloomberg: “The aim is to drive down the cost of those medications by 30 percent.”

MYTH #2: The Part B demonstration will establish drug prices that are impossibly low — damaging drug companies and hurting our health system.

  • Americans would still pay Pharma more for drugs than other developed countries.

    • The New York Times: “A government study that said Medicare was paying 80 percent more than other advanced industrial countries for some of the most costly physician-administered medicines.”

    • Secretary Azar: “Over the next five years under this model, we will go from paying 180 percent of what other countries pay for these drugs to 126 percent of what they pay.”

  • Lowering prices in Part B will have little to no impact on innovation.

    • National Academy of Sciences: “NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016. “

    • HHS: “The possible savings American patients would receive over five years represents less than 1 percent of pharmaceutical R&D spending during that time; and the pharmaceutical industry has offered no evidence of that amount having a meaningful impact on innovation.”

  • Drug companies can easily make that up by reducing advertising and marketing spending.

    • Washington Post: “Nine out of 10 big pharmaceutical companies spend more on marketing than on research.”

    • JAMA: “From 1997 through 2016...DTC prescription drug advertising increased from $1.3 billion to $6 billion with a shift toward advertising high-cost biologics and cancer immunotherapies.”

MYTH #3: The demonstration will result in worse care for patients. The government should not replace a market-based system with government price setting.

  • The 16 countries used for reference by and large have better health outcomes and longer life expectancy than the U.S., while spending about half as muchper capita for health expenditures. 

    • Kaiser Family Foundation and Peterson Center on Healthcare: Of the 16 other developed economies in the IPI, Americans have worse health outcomes than: Austria, France, Germany, Japan, Sweden, and the United Kingdom.

    • Central Intelligence Agency: Of the 16 other developed economies in the IPI, Americans have shorter life expectancies than 13 of them: Austria, Belgium, Canada, Finland, France, Germany, Greece, Ireland, Italy, Japan, Spain, Sweden, and the United Kingdom.

    • World Bank: Of the 16 other developed economies in the IPI, Americans spend more on health care as a percentage of GDP than all of them: Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden, and the United Kingdom.

  • The current system is broken.

    • CNN: “Americans pay anywhere from two to six times more than the rest of the world for brand name prescription drugs.”

    • Wall Street Journal: “Compared with the U.S., drug prices are far lower in many overseas countries...Critics have long held that the [U.S.] percentage-based ‘add-on’ fee create incentives for doctors to use higher-priced drugs.”

  • The Part B demonstration does nothing to slow the FDA approval process.
    Multinational drug corporations will still want early access to the higher prices in the U.S. 

MYTH #4: Americans do not support the Part B proposed changes. 

  • According to a GOP pollsterAmericans overwhelmingly support the International Pricing Index to lower drug prices.

    • Voters support the HHS proposal to lower drug prices by a 71-point margin (80 percent support vs. 9 percent oppose).

    • Majorities from both parties agree that Democrats and Republicans in Congress should support the proposal.

    • Notably, 8 in 10 voters believe the proposal will result in better care or have no impact on the care they receive.