Will Anyone Be Able to Afford Covid Drugs?

isn't dead yet. But first, here's what happened today. Protests against police violence continued in every state in the US and some cities around the world. Some protesters defied US city curfews, but demonstrate raiders were overwhelmingly peaceful. Still, President Donald Trump on Wednesday urged police to get tough and appeared to double down on his support for the use of greater force to quell protests. The pandemic isn't finished

with the US labor market. Economists believe a second wave of job cuts is around the corner, and this one will hit white collar workers particularly hard. Close to six million jobs are potentially on the line, according to Bloomberg Economics, that includes higher paid supervisors in sectors where frontline workers were hit first, such as restaurants in hotels. Industries connected to those service sectors will also see a knock on effect,

like professional services, finance, and real estate. The extent and details of the spillover job cuts will start to reveal themselves Friday, when the government releases its May employment report. The unemployment rate probably soared to nineteen point five, the highest since the Great Depression. New York Governor Andrew Cuomo declared victory over the coronavirus pandemic, touting the lowest daily death toll and hospitalization rate since it began, but in Florida,

cases jumped the most in nearly two weeks. Florida began a phased reopening on May four, and now our main story. The drug industry has been pouring resources into researching and developing treatments and vaccines for COVID nineteen that has helped

quiet a long running debate over rising prescription costs. The pharmaceutical industry hopes that efforts to reform drug pricing, which had bipartisan support before the pandemic, are now dead, But Senate Finance Committee Chairman Chuck Grassley insists that the long delayed drug price bill he is co sponsoring will get a vote this year. The bill would limit drug price increases.

Grasslely worries that if the bill doesn't pass, drugmakers will charge whatever they want for COVID nineteen related drugs and the Court and Riley Griffin spoke to Senator Grassley about what coronavirus means for his efforts to stem the rising price of drugs. So, Riley and Emma, can you tell us a bit about this drug price bill that the senators vonagon It is a co authored bill by Senator

Chuck Grassley and Democratic Senator Ron Wyden. One key component of this bill is what some call an inflation cap, others call an inflation rebate, but it would ultimately penalize drugmakers that raise prices past the rate of inflation. That is one of the sticking points of this bill. It's one that has a little bit more disagreement within the committee, but ultimately what makes it so novel um, but there's been a slow burn in getting this across the finish line.

We haven't yet seen this bill introduced by Mitch McConnell to the to the broader Senate. But M and I spoke with Senator Chuck Grassley about his bill, which many have considered dead. To be quite frank, it's missed a couple of key deadlines. He suggests that this bill is not dead. In fact, it has more potentially momentum than ever as we look forward and consider affordability questions related to the coronavirus. So, the price of drugs has been a hot button topic in America for years. Why are

we hearing about this bill now? In some corners of this debate, you know, the perspective is that drug pricing is is kind of this debate is over right. COVID nineteen has sort of, you know, many people have said, sucked the oxygen out of the room. I mean, we're basically plowing as many as resources as possible into trying to alleviate the health as well as economic impact of

this pandemic. In many ways, the Republicans and Democrats have have been talking about drug pricing for years, haven't reached a consensus, even though Americans have, you know, said for a long time they're worried about the price of their medication. They're worried about whether they can afford to keep taking the medication. You know, we've been talking about drug pricing

for so long nothing has happened. Can we really do anything now that there's a pandemic on um But you know, when Riley and I spoke with Chuck Grassley, the senators sort of said, this is the right time to address it. Right the need for drugs affordability is still central to our conversation. It also highlights the need to act for the next pandemic right now. There's nothing to stop bad actors in the pharmaceutical industry from hiking prices astronomically when

the next pandemic would hit. So there's no reason whatsoever for delay of our legislation given that we are so reliant on the pharmaceutical industry to make these vaccines and therapeutics that will hopefully get us out of this public health crisis. And I thought that was a really interesting point. But I think you know a lot of folks who have been watching this would would probably disagree with him about the feasibility of getting legislation passed at this moment.

So I am wondering on that point. With the new relevance of vaccine therapeutics, as you mentioned, for COVID nineteen. Are there elements in that bill that will specifically address these What Senator Chuck Grassley had said was fundamentally, those provisions do impact any pharmaceutical, whether it's a vaccine, whether

it's a therapeutic. It's not necessarily limited to COVID nineteen treatments, but it touches diabetes, it touches cancer therapies, it touches immunology, drugs, um and very much so when we have this conversation, for the most part, um it's about branded drugs, right, not your off patent generics which account for nine and ten medicines in in your cabinets, but newer drugs coming to market with pricier tags. Regardless, healthcare is the number one issues for voters. We know that going into the

presidential election, healthcare has taken the number one slot. It is interesting to consider whether or not the drug pricing debate itself will shift in the wake of the coronavirus, whether or not you'll see lawmakers take a more sympathetic view in their relationships with the pharmaceutical industry, because remember that relationship between Washington and Fharma had been quite antagonistic up until this point, I think it's important to point

out also, you know, when we're talking about the Grassley Widen Bill, for instance, that we're the focus here is is really on restricting how much drug companies can increase prices. Right. So there's this sort of almost annual or bi annual tradition of of drug companies raising the prices of their drugs in January and then again in the summer. And this is what Grassley is really talking about in this bill.

He says that you know, we asked him, are you worried about what will happen with the pricing of COVID nineteen products? And he said, without the Grassley Widen bill is wild country. Whatever they want to price, said that they're going to because look at what happened January of this year, these fabulous increases in drugs. It's a wild West. Another words, he said, drug companies could charge whatever they

want to. But the reality is that this bill is really focused on sort of what happens after drug companies

price their product. Um. I would also sort of note that in some ways the conversation about drug pricing and COVID nineteen is is almost academic and largely theoretical at this point, you know, we really haven't gotten to a point where we have you know, enough products that have been you know, approved for COVID nineteen that are are thought to be really helpful that that where we're going to have this kind of UM conversation really aired out.

Is there a concern at all about the election potentially delaying the passing of this bill. Absolutely. I think that the expectation of the committee was first to have this done earlier in the year. UM. When I spoke with folks in Washington close to this bill last fall, for example, the hard stop I was given was May, and we've passed that point. Right. The new date that's being floated is September. I think the closest the closer you get to the election cycle, the more this becomes a politically

charged package. Right. There really has to be the perfect storm to get this bill across the finish line before the election, and I would say more people than not are somewhat skeptical that that storm will come into play

in this really tight timeline. I would also kind of note that, Um, what we heard from Chuck Grassley, which I thought was quite interesting, was he said, you know, pharma should want what we're doing here, because ultimately, you know, if Democrats come into power and d c um come September, you know they're going to be proposing really aggressive of

changes to drug pricing. And I would think that Big Farmer would think in terms of keeping a Republican president and a Republican majority in Congress pretty important because if we have a Democrat president and we have a Democratic Congress, which means that the government is going to be very deeply involved in setting drug prices. We've seen both Republicans and Democrats talk about drug pricing a lot, especially in recent years, but their visions of sort of how it

should change are are very different. And finally, I did want to just circle back to a point both of you raised, but I was hoping that you might be able to dig deeper on it about overall the pharmaceutical industry's reaction to this proposed bill. What what what is

their reaction? I think the pharmaceutical industry, the lobby companies, would say a lot of the rising drug costs aren't actually attributable to those who manufacture the drugs, but to those that are outside of their control, and they'd like to see some changes made there, but this question, for example, of the inflation cap, that's not something that industry supports,

there adamantly against it. And so if a delay is here to seeing the Senate Finance Committee bill pass as is, that won't necessarily come as bad news too many as the CEO of BIO the excuse me, the incoming CEO of BIO another trade organization said to US, any drug pricing reform that existed prior to this pandemic is quote obsolete um. And that's a that's a very interesting and compelling perspective because it suggests that we have to start

from scratch um. And I think that lawmakers like Senator Grassley would be fairly opposed to the notion. And with COVID nineteen, you know, being such a huge kind of factor is the fact that the industry is really benefiting

in terms of public perception. So people have been up in arms about the prices of drugs for years in the US, and suddenly, you know, we're turning to the pharmaceutical industry and saying, can you please come up with a vaccine and some several vaccines and drugs so that we can kind of get out of this whole situation. I think you know you're going to see that be a really powerful tool shaping discourse, you know, in the coming months. That was m The Court and Riley Griffin.

And that's our show today. For coverage of the outbreak from one D and twenty bureaus around the world, visit Bloomberg dot com slash Coronavirus and if you like the show, please leave us a review and a rating on Apple Podcasts or Spotify. It's the best way to help more listeners find our global reporting. The Prognosis Daily edition is produced by Tobah Foreheads, Jordan Gaspure, Magnus Hendrickson and me Laura Carlson. Today's main story was reported by Emma Court

and Riley Griffin. Original music by Leo Sidran. Our editors are Francesca Levi and Rick Shine. Francesco Levi is Bloomberg's head of podcasts. Thanks for listening.