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PhRMA CEO warns Pelosi bill to lower drug prices would be 'devastating' for industry

The head of the main pharmaceutical industry lobbying group on Thursday warned that a bill to lower drug prices from Speaker Nancy PelosiNancy PelosiThe Hill's 12:30 Report - Presented by Facebook - Biden reverses Trump limits on transgender protections The Hill's Morning Report - Presented by Facebook - Infrastructure, Cheney ouster on deck as Congress returns This week: Congressional leaders to meet with Biden amid GOP reckoning MORE (D-Calif.) would have a “devastating” effect on the industry and weaken its ability to develop new treatments. 

The Pharmaceutical Research and Manufacturers of America (PhRMA) is one of the most powerful groups in Washington, and its CEO, Steve Ubl, outlined on Thursday the arguments the group is making as it seeks to ward off a push from the House, Senate and Trump administration to crack down on its prices. 

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“If H.R. 3 becomes law, it is lights out for a lot of very small biotech companies that are pre-revenue and depend on attracting capital,” Ubl told reporters on Thursday, using the formal name for Pelosi’s bill. 

Pelosi’s measure is expected to pass the House as soon as the end of October. 

But the bill faces tough odds in the Republican-controlled Senate, where Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellManchin, Biden huddle amid talk of breaking up T package Romney: Removing Cheney from House leadership will cost GOP election votes The Hill's 12:30 Report - Presented by Facebook - Biden reverses Trump limits on transgender protections MORE (R-Ky.) has vowed to block what he has called "socialist price controls." 

Pelosi hopes if President TrumpDonald TrumpCaitlyn Jenner says election was not 'stolen,' calls Biden 'our president' Overnight Health Care: FDA authorizes Pfizer vaccine for adolescents | Biden administration reverses limits on LGBTQ health protections Overnight Defense: US fires 30 warning shots at Iranian boats | Kabul attack heightens fears of Afghan women's fates | Democratic Party leaders push Biden on rejoining Iran deal MORE, who has long railed against high drug prices, endorses her bill, it would push it toward the finish line, though a potential deal could be more unlikely given the House’s impeachment inquiry against Trump. 

Ubl, though, said his group is treating Pelosi’s measure, which would allow the government to negotiate lower prices on up to 250 drugs per year, as a real threat of becoming law, and is pushing back accordingly. 

“I think there may be a mistaken notion in certain quarters that this is a messaging bill that won't become law and therefore it's a free vote, and we're here to say otherwise,” Ubl told reporters. “This type of policy would have a devastating effect on the industry and the patients that we serve and we're going to continue to take it very seriously and engage with policymakers accordingly.”

Supporters of the measure say the industry’s arguments that cutting drug prices would reduce innovation in new drugs is always the argument that industry makes to protect their high prices. 

“It's not going to hurt innovation,” Pelosi said at an event earlier this week in Washington state, saying that the bill would invest in research at the National Institutes of Health. 

“We will have savings that we can reinvest in innovation that benefits everyone and not just the bottom line of the pharmaceutical industry,” she said. 

House Democratic lawmakers were given a memo last month from focus groups of swing voters conducted by the firm Hart Research Associates. "Pharmaceutical companies' claims that this bill will stifle investment in R&D are met with skepticism and have a very limited impact on swing voters,” the memo states. “Many see pharma's message point as a scare tactic that drug companies have used for years to avoid reforms that will cut into their profits.” 

Many leading drug companies are highly profitable. PhRMA argued on Thursday that reducing its companies’ profits would reduce the incentive for investors to take a risk by investing in drug companies, whose new treatments often fail somewhere along the line in development. 

“We rely on capital investment to develop our R&D to produce new medicines,” said Lori Reilly, chief operating officer for PhRMA. “If you do diminish the return element, or the profitability element of that, you take away the incentive for many investors to put money in here, because there's lots of places you can invest in, lots of places that carry a lot less risk.”

Sens. Chuck GrassleyChuck GrassleyOn The Money: Biden says workers can't turn down job and get benefits | Treasury launches state and local aid | Businesses jump into vax push Grassley criticizes Biden's proposal to provide IRS with B The Hill's Morning Report - Presented by Facebook - Infrastructure, Cheney ouster on deck as Congress returns MORE (R-Iowa) and Ron WydenRonald (Ron) Lee WydenBad jobs report amplifies GOP cries to end 0 benefits boost Putting a price on privacy: Ending police data purchases Overnight Health Care: Biden sets goal of at least one shot to 70 percent of adults by July 4 | White House to shift how it distributes unallocated vaccines to states MORE (D-Ore.) have proposed a somewhat more modest drug pricing bill.

But PhRMA also opposes that measure, and many doubt McConnell will bring up even that more modest bill. 

Ubl argued that his group is not opposed to all action on drug prices, though, and would support actions that lower what patients pay out of pocket, rather than cutting the overall sticker price of the drug. 

“The industry would support a balanced package,” he said. “We're not for the status quo.”