US drug pricing bill could reduce manufacturer revenue by over $450 billion

A  new analysis by the health care analytics and research firm Avalere reveals the US Senate’s partisan drug pricing bill will have a much deeper impact on the biopharmaceutical research industry than previously reported, noted the leading US sector lobby group Pharmaceutical Research and Manufacturers of America (PhRMA), which gave its assessment of the implications.

Avalere’s estimate puts the reduction of revenues of biopharmaceutical research companies from so-called negotiation, or the government price-setting provision of the drug pricing bill, at closer to $455 billion over the next 10 years.

And the bill imposes other price controls on prescription medicines, including a penalty for changes in drug prices that are greater than the rate of inflation. Based on data from the Congressional Budget Office (CBO), this provision would lead to an additional $190 billion hit to the industry.