WASHINGTON D.C. – The Biden administration has announced the first 10 prescription drugs impacted by the Inflation Reduction Act’s measures giving Medicare the power to negotiate lower prices directly with manufacturers. This historic achievement is long overdue because Big Pharma has stopped it from happening for decades while they continued to make record profits. A recent analysis from government watchdog Accountable.US found some of the major pharmaceutical companies that produce the affected, notoriously expensive drugs – including Merck, Eli Lilly, and Johnson & Johnson’s Janssen – reported combined earnings of $38.7 billion in 2022. Meanwhile, these companies’ combined stock buybacks and dividends increased by $1.9 billion and $1.5 billion, respectively.
Big drug companies raked in billions in profits while standing in the way of lower prescription drug costs for millions of seniors. The time of Big Pharma grossly overcharging American seniors on life-saving medicines is coming to an end,” said Tony Carrk, Executive Director for Accountable.US.
“This historic achievement is still under threat, however, because the MAGA House Majority is hellbent on repealing the Inflation Reduction Act. They would rather pad the profits of their major industry donors than help seniors who are literally choosing between food and medicines,” added Carrk.
Big Drug Companies and Their Allies in Congress Will Say or Do Anything to Keep Drug Prices Unaffordable: The announcement today from the U.S. Department of Health and Human Services comes on the heels of a lawsuit filed by the Pharmaceutical Research and Manufacturers of America (PhRMA) seeking to block the Inflation Reduction Act’s measures allowing Medicare to use its bulk purchasing power to negotiate lower prices for beneficiaries. While Big Pharma spent $400 million lobbying last year alone, an Accountable.US review found PhRMA spent nearly $70 million lobbying against efforts to allow Medicare to negotiate the prices of prescription drugs and other measures to lower drug prices in the years leading up to the passage of the Inflation Reduction Act. Industry wide, manufacturers reportedly upped prices on at least 350 drugs in the U.S. in January. Last week, UK drug manufacturing giant AstraZeneca filed the eighth lawsuit filed against the Biden effort to save seniors billions of dollars on life-improving-and-saving medicines. Meanwhile, members of the MAGA House Majority who have taken millions of dollars from the pharmaceutical industry are pushing a bill to fully repeal the IRA and all its cost saving initiatives for seniors.
While drug companies often claim that price increases are necessary to fund research and development, Accountable.US has previously found that the five-biggest U.S.-based pharmaceutical companies’ $112 billion in research and development spending from 2019 through 2021 had been outpaced by the $125 billion they spent on stock buybacks and dividends over the same period. Based on their own earnings reports, it’s clear these price hikes are just a way to extract more money from patients in need and redistribute it to wealthy shareholders.