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In Pandemic, Pharma Attempts an Image Reset — But Americans Still Want Pricing Reform

A reality television show. Ads splashed across TV and in newspapers. Aggressive and expensive lobbying campaigns. Long-criticized pharmaceutical companies are spending big during the COVID-19 pandemic to sway public opinion and beat back attempts to rein in drug prices, but polls show that Americans still want policymakers to act.

Under fire in recent years for escalating drug prices and facing a groundswell of demand for drug pricing reform, the pharmaceutical industry has ramped up efforts during the pandemic to burnish its reputation by touting its COVID-19 response.

But Americans remain as adamant as before that drug prices are too high and the government must take action to lower prescription drug prices.

9/10

People surveyed who said they are concerned the pharmaceutical industry would leverage the pandemic to raise drug prices.

Nine out of 10 people surveyed said they are concerned the pharmaceutical industry would leverage the pandemic to raise drug prices, according to a poll Gallup and West Health. The same poll also found strong, bipartisan support for government action on drug prices — with 88 percent specifically interested in allowing the federal government to directly negotiate prices with drug makers for COVID-19 treatments, a sentiment that held up regardless of political identity.

That’s significant because government negotiation is an even more aggressive policy than what was embraced by voters earlier this year. In March, 83 percent of Americans said they supported a more centrist policy that would establish an inflation penalty requiring drugmakers to provide rebates when they raise prices faster than inflation and cap out-of-pocket costs for prescription drugs for people on Medicare, according to a poll by Patients for Affordable Drugs of 1,100 likely voters.

83%

Americans who said they supported a policy that would establish an inflation penalty and cap out-of-pocket costs for prescription drugs for people on Medicare.

This shift in sentiment indicates that Americans are doubling down on their desire to bring down drug prices despite pharma’s aggressive lobbying and marketing campaigns that have become more prolific since coronavirus struck the United States.

Pharma has made it clear that their reputation is on the line amid the pandemic.

In an earnings call with investors in April, Gilead’s CEO acknowledged the industry’s desire to turn the tide on pharma’s negative public sentiment, saying that the industry’s scramble to produce COVID-19 vaccines and treatments “will certainly help the industry’s reputation.”

Johnson & Johnson launched an eight-episode reality show featuring CNN personality Lisa Ling as host to promote its development of a vaccine. Prescription drug makers are flooding the airwaves, with some reports showing an increase in their spending on advertising this year — for example, Pfizer, which is also working to develop a COVID vaccine, increased digital ad dollars in the first half of 2020 by 500 percent compared to the same period last year.

500%

Increase in digital ad dollars in the first half of 2020 by Pfizer, who is working to develop a COVID-19 vaccine.

They are also lavishing members of Congress with cash. According to reports in STAT News, drug giants Merck and AstraZeneca, both racing to create a vaccine, grew their lobbying spend to $2.6 million and $780,000 respectively. Gilead Sciences, which makes remdesivir — one of the only drugs to receive an emergency use authorization from the government to treat COVID-19 — increased lobbying expenditures by more than 18 percent to $1.28 million, according to STAT.

$1.28M

Amount COVID-19 drug maker, Gilead Sciences, increased lobbying expenditures.

Still, there’s little to no evidence to suggest that attitudes are shifting in pharma’s favor — in fact, polling throughout by West Health and Patients for Affordable Drugs among others confirms that Americans still believe, as they did before, that something should be done about high drug prices and their preferred solutions are perhaps becoming more progressive.

Despite the clamor for pricing reform, Congress has yet to come to a compromise. House Democrats last year passed H.R. 3 to lower drug prices, but the bill failed to find support in the Senate. Democrats revived one piece of the bill — a provision that would allow Medicare to negotiate drug prices — and attached it to a broader legislative package H.R. 1425 aimed at expanding coverage through the Affordable Care Act. However, the Republican-controlled Senate has not considered the bill, which has been characterized as a messaging document by the Democrats.

Meanwhile, a bipartisan Senate proposal touted by Senate Finance Committee Chair Chuck Grassley and ranking member Ron Wyden was gaining traction before the pandemic but collapsed this summer amid partisan rancor. President Trump issued a number of executive orders touted as a means to lowering drug prices, but none are expected to meaningfully and effectively bring down the cost of prescription medications.

Despite widespread skepticism about the orders’ effectiveness — including doubt voiced by pharmaceutical executives on their earnings calls (Pfizer’s CEO called them “an enormous distraction”) — drug makers nonetheless publicly demonstrated outrage over the plan, even refusing to meet with Trump after the orders were signed.

In an unusual move, President Trump declined to release details about one of the orders, a rule he has referred to as a “most-favored nation” policy that ties U.S. drug prices to the least expensive drug prices available in another high-income country. President Trump has instead given pharmaceutical companies until Aug. 24 to strike a deal and come up with a more favorable idea — they have so far refused to meet his demands.

The pharmaceutical industry has long claimed that drug pricing legislation would hamper its ability to innovate, an assertion that’s been rehashed during the pandemic and the pharmaceutical race to develop coronavirus treatments and vaccines. The CEO of the drug industry trade group Biotechnology Innovation Organization (BIO) told Bloomberg News that pre-pandemic discussions about drug pricing reform are “’now obsolete’ because it would hamper innovation at a critical time.”

In contrast, the pandemic and economic crisis have only heightened the attention and urgency to create more affordable prescription drugs.

Before the pandemic, prescription drug prices were rapidly rising. According to one study, the net cost increased three times faster than the inflation rate in a decade. Prescription drug spending represents about 15 percent of all health care spending. And 23 percent of people reported lacking money to afford their prescription drugs.

With 30 million people now unemployed — and countless others facing financial hardship and struggling to afford medications, the demands for more affordable prescription drugs have become more urgent.

“Americans were worried about their drug prices before COVID, with many people struggling to afford their cancer drugs, insulin and other medicines needed to manage chronic disease,” said Mark Miller, Executive Vice President at Arnold Ventures. “The pandemic hasn’t changed that worry — if anything, they are more concerned. Meanwhile, the pharmaceutical industry is trying to derail drug pricing reforms supported by the House, the Senate, the President, and most importantly, the public, who are still struggling with the drugs they need every day.”