Pharma's biggest lobbying group is trying to rehabilitate its image by excluding drugmakers that spend too little on researching new products.
The Pharmaceutical Research and Manufacturers of America, or PhRMA, created new membership rules that emphasize spending on research and development. Behind the decision outlined Tuesday is a major campaign to rehabilitate the industry's image after years of jacking up drug prices.
PhRMA's new rules aim to reinforce the most common defense of high drug prices: the need to recoup high research and development costs. Some drugs can take more than a decade to develop and top $1 billion in costs.
But that argument has rung hollow in some cases of big price increases, as drugmakers acquire a new product after the research and development has been done and then jack up the price.
PhRMA's new rules require members to spend 10 percent or more of their sales on global research and development over three years. It also requires drugmakers to spend at least $200 million per year on research and development.
The group said the new rules reinforce PhRMA's commitment to "time-intensive, scientifically sound research."
The group already has seen some high-profile exits, as Marathon Pharma is the latest drugmaker to leave the group.
It resigned last month after igniting congressional ire for charging $89,000 a year for a drug that treats rare pediatric diseases. Marathon has since sold the drug called Emflaza.
The new rules went into effect immediately, and 22 companies are no longer members, according to a statement. Of the 22 companies, 15 were in the "associate" membership category that was eliminated, and seven didn't meet the criteria.
In addition to the new rules, PhRMA has been doing a multimillion-dollar ad campaign called "Go Boldly," which highlights drug research. The campaign ran an ad during the Super Bowl.
PhRMA's campaign comes at a time of uncertainty for the pharmaceutical industry. President Trump has railed against the industry for charging high prices, even saying that the industry won't be politically protected anymore.
Democrats had hoped that Trump would join their efforts to adopt several sweeping reforms such as giving Medicare the power to negotiate with drugmakers for lower prices and the ability for Americans to buy cheaper drugs from Canada. However, the White House has yet to formally push either idea.