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Prescription Drugs Are Going To Get Cheaper Because Dems Played The (Very) Long Game

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If you would like to understand why Democrats and their allies are so excited concerning the prescription drug reforms that President Joe Biden signed on Tuesday, it helps to take into consideration how long they’ve been attempting to put those reforms on the books.

The concept of giving the federal government leverage over pharmaceutical prices goes back many years, a minimum of to the early Nineties when former President Bill Clinton was putting together his ill-fated plan for universal health care. He remembered the stories he had heard on the campaign trail, about average Americans combating the prices of medicines for conditions like diabetes, hypertension or multiple sclerosis, and at one point advisers contemplated a freeze on prices to offer quick, temporary relief.

The Clinton team settled as an alternative on another proposals, including one that will give the federal government power to barter prices directly with pharmaceutical corporations, who were predictably unhappy about it. Their lobbying against the Clinton plan contributed to its eventual demise, cementing the impression that the drug industry would never lose an enormous fight over their pricing practices.

Except now it has happened.

A key provision of the Inflation Reduction Act, which is the law Biden signed this week, gives the secretary of health and human services authority to barter the value of medicine within the Medicare program. And Democrats were in a position to pass it despite an onslaught from an industry that, based on OpenSecrets.org, spent $187 million on lobbying this 12 months alone.

Sen. Bernie Sanders (I-Vt.) speaks about drug prices at a 2018 press conference, while House Democratic leader Nancy Pelosi (Calif.) and Senate Democratic leader Chuck Schumer (N.Y.) look on. It could be nearly three years before Democrats got control of Congress, however the work they did back while they were still within the minority laid the groundwork for the laws they only passed.

Tom Williams via Getty Images

“Pharma didn’t lay down their weapons on this fight,” Larry Levitt, executive vp on the Henry J. Kaiser Foundation, told HuffPost. “This was unquestionably the most important political loss Pharma has suffered.”

The defeat was removed from total, with industry allies contained in the Democratic caucus winning concessions that significantly reduced this system’s reach. Only a small number of medicine can be subject to cost negotiation, and even then only inside certain parameters that can almost definitely leave prices within the U.S. higher than they’re overseas. The primary negotiated prices will not take effect until 2026 and the drug industry may yet discover a method to weaken this system much more, through litigation, laws or each.

But other drug price reforms will kick in just a little sooner, with more visible effects. High on that list is a latest, $2,000 limit on out-of-pocket expenses for Medicare beneficiaries that can phase in over two years, starting in 2024. As for the negotiating power, future lawmakers could dial it up just as surely as they might dial it down. That possibility, as much as any immediate, real-world effects, is what the industry fought so hard to stop and what advocates fought so hard to preserve.

“Sometimes it looks as if Congress creates policy overnight, but actually these plans are typically years, if not many years, within the making.”

– Larry Levitt, Henry J. Kaiser Family Foundation

“It is a seismic shift,” Sen. Ron Wyden (D-Ore.) told HuffPost. “For the primary time, the scales are shifted and Big Pharma goes to need to do what everybody else on the planet does, which is to barter.”

After all, Wyden and everybody else who supported the bill have another excuse to feel good concerning the laws. They understand what it took to get this far. If there’s an untold story concerning the latest prescription drug reforms ― or, a minimum of, an under-appreciated one ― it’s about how much of the work took place before Democrats gained full control of Congress and Biden got here to the White House.

House Democrats Got To Work Quickly

One reason the federal government hasn’t directly negotiated drug prices until now’s that it literally would have been against the law.

When Republican lawmakers wrote the 2003 statute making a drug profit in Medicare, they included a clause prohibiting the federal government from meddling with prices. Democrats were livid (as were a handful of Republicans) and said that striking the prohibition can be a top priority going forward.

But Democrats didn’t pursue that goal in 2009 and 2010, once they had full control of Congress and Barack Obama was within the White House, because they were focused on passing what became the Inexpensive Care Act. As a part of a deal to maintain the drug corporations from doing to “Obamacare what industry lobbyists had once done to “Clintoncare,” the White House and Democratic leaders agreed to not make government negotiation of costs a part of the brand new scheme.

Obama circled back to the concept later in his presidency, but he never got the prospect to make it occur. The identical thing was true for Hillary Clinton, who not only made government price negotiation a key campaign promise in 2016 but in addition had lengthy conversations with experts and advocates over find out how to draw up laws.

Razor-thin majorities meant every Democrat had leverage over the final bill. Sen. Kyrsten Sinema (D-Ariz.), shown here in July of 2022, used hers to push for a much weaker initiative.Razor-thin majorities meant every Democrat had leverage over the ultimate bill. Sen. Kyrsten Sinema (D-Ariz.), shown here in July of 2022, used hers to push for a much weaker initiative.

Drew Angerer via Getty Images

“The plan from Clintonland was to go after pharma instantly — it was a done deal,” Alex Lawson, executive director of the progressive advocacy group Social Security Works, told HuffPost. “We were talking about big ideas, executive actions, that she could take instantly, after which there was going to be laws too.”

All of that set the stage for the 2018 midterm campaign, when Democrats sensed a possibility to win back control of the House for the primary time in nearly a decade.

Progressive groups like Social Security Works and Public Citizen were pushing hard for strong prescription drug reforms, as were organizations more focused on health care like FamiliesUSA and Patients for Inexpensive Drugs Now. They usually had a receptive audience in Democratic leadership, especially House Speaker Nancy Pelosi (D-Calif.), who saw it as her top piece of unfinished business from the last time Democrats controlled the chamber.

“We made quite a lot of headway within the last Congress. No less than 50% of the ultimate bill got here from there.”

– Senate Finance Chairman Ron Wyden

House Democrats started working on laws quickly after taking control of the chamber in early 2019. However it wasn’t easy. The policy selections they faced created some serious rifts, ceaselessly pitting progressives like Lloyd Doggett of Texas against centrist counterparts like Scott Peters of California. Among the many arguments were questions of which drugs must be subject to negotiation — and exactly how the negotiation process should work.

At several points, tensions spilled out into public view, with one side or the opposite threatening to withhold its votes and tank the entire effort. However it never got here to that and, in December of 2019, the House passed H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, named for the longtime Maryland lawmaker (and shut Pelosi ally) who had crusaded for lower drug prices before his death.

Getting A CBO Rating Was A Key Step

The passage of H.R.3 didn’t get a ton of attention, partly because something else was happening in Washington on the time. Just two days earlier, House Democrats had issued their articles of impeachment against then-President Donald Trump.

There was also the indisputable fact that the House bill stood almost no probability of becoming law. Republicans still controlled the Senate, and Republican leaders had said repeatedly they wouldn’t take up the laws. Trump, despite frequent talk of getting tough with drugmakers, had finally announced that he, too, opposed the House bill.

However the exercise of passing laws forced Democrats to translate their goals and slogans into policy specifics, which meant coping with quite a lot of technical issues and making some difficult political selections. “Sometimes it looks as if Congress creates policy overnight, but actually these plans are typically years, if not many years, within the making,” Levitt said. “Doing the groundwork, like Speaker Pelosi did with H.R. 3, puts you able to act quickly when the political stars align.”

Rep. Pramila Jayapal (D-Wash.), speaking here at a March 2022 conference of the House Democratic Caucus, wasn't happy with compromises that went into a 2019 House bill — or additional concessions that went into the final law this year. Even so, she praised the bill as a major victory in the campaign for more affordable health care.Rep. Pramila Jayapal (D-Wash.), speaking here at a March 2022 conference of the House Democratic Caucus, wasn’t glad with compromises that went right into a 2019 House bill — or additional concessions that went into the ultimate law this 12 months. Even so, she praised the bill as a significant victory within the campaign for more cost-effective health care.

Tom Williams via Getty Images

A very critical step within the Democratic drug pricing effort was agreeing on a mechanism to get drugmakers to just accept negotiated prices, after which getting the Congressional Budget Office to certify that the mechanism would produce real savings. The latter was a significant focus for Pelosi’s office throughout 2019.

“When my teams sat right down to do that, the within team and the surface team, we vowed that, after we’re done, we’re going to have a CBO rating that was substantial — that we’re going to have outside validation that negotiation really produced savings,” Wendell Primus, Pelosi’s senior adviser on health care issues, told HuffPost.

They fulfilled that vow: When Democrats eventually settled on a tax penalty for drugmakers that refused to barter, the CBO concluded the resulting price drop would save the federal government greater than $450 billion over 10 years. And as contentious because the debates over laws got at times, they forced the party’s factions to work through their differences and get behind a set of reforms they might all support.

“It was a knock-down, drag-out fight … I actually have the scars to indicate from it,” said Lawson, who together with other progressives pushed for more expansive negotiating authority, in addition to the flexibility to threaten patents when drug prices were uncontrolled.

“But I feel that what it yielded in H.R. 3 was a really strong compromise bill that got each the proper of the caucus and the left of the caucus on board, and the surface groups too,” Lawson said.

Pondering ahead to how that laws prepared Democrats for what they did in 2021 and 2022, Lawson said, “The tracks were laid down.”

Senate Democrats Used The Leverage They Had

Democrats within the Senate were also desperate to do something on drugs. They usually had a forum within the Finance Committee, where the rating Democrat, Ron Wyden of Oregon, had working relationship with the Republican chair, Charles Grassley of Iowa.

Wyden was a longtime advocate for seniors’ health care, going back to the Seventies and his tenure as a pacesetter within the Gray Panthers. Grassley had ceaselessly criticized the drug industry for what he thought was price gouging. They worked together on a bipartisan bill that they hoped Trump would support, given his frequent jabs on the industry, and that GOP leaders would eventually allow onto the ground.

It didn’t occur, but, as within the House, the exercise of writing the bill gave Democrats a probability to work through the main points of some key policy concepts — amongst them, penalties for corporations that raised their prices faster than inflation. That provision became a cornerstone of a proposal Wyden released in 2021, after Biden took office.

“We made quite a lot of headway within the last Congress,” Wyden said last week, excited about the inflation penalty scheme and its origins. “No less than 50% of the ultimate bill got here from there.”

Wyden’s 2021 announcement was one other one in every of those developments that got quite a lot of eye-rolling in Washington. But many advocates saw it as each a blueprint for laws and a sign that Democrats were serious about reform — a signal that seemed especially poignant coming from the Finance Committee, which was notorious for its past hostility to more expansive health reforms.

“The cash committees, that’s where good ideas go to die,” Lawson said. “But when Wyden put out his road map, it was really strong. … He was really out front on attempting to do something real on drug prices.”

Eliot Fishman, senior director of health policy at FamiliesUSA, told HuffPost the Wyden road map was “an enormous step.”

“Remember,” Fishman said, “there was still doubt within the spring of 2021 if pharmaceuticals was going to sink the package, and Wyden solidified the Senate at a key moment.”

It Was Still On Biden And Allies To Get The Job Done

As vital as all the groundwork was, it merely meant that Democrats in 2021 had a possibility to pass prescription drug reform. It still took a herculean effort, by the White House and leaders in each houses of Congress, in addition to the advocacy groups that had been pushing the concept for thus a few years.

They’d a couple of things going for them, starting with the widespread support for his or her agenda: Government price negotiation is popular even with Republican-leading voters, based on polls, and is probably going an enormous reason so many moderate Democratic lawmakers were pushing for it as strongly as some progressives. It also helped that aggressive motion on pharmaceuticals would result in less federal spending, freeing up funds for other Democratic priorities or reducing the deficit.

“It was a knock-down, drag-out fight … I actually have the scars to indicate from it.”

– Alex Lawson, Social Security Works

“It could have been policy and political malpractice to not benefit from the moment,” consultant and longtime Democratic health care adviser Chris Jennings told HuffPost.

But with razor-thin Democratic majorities in each houses, Sen. Kyrsten Sinema of Arizona and other industry allies wary of aggressive reforms had extra leverage. The result was more tension, multiple hold-your-breath moments and eventually a series of major compromises on the scope of negotiating power that dissatisfied and sometimes infuriated the measure’s progressive champions.

Amongst them was Sen. Bernie Sanders (I-Vt.), who called the ultimate agreement “weak,” and Rep. Pramila Jayapal (D-Wash.), who told The American Prospect this week she still has “heartburn” over deals that can delay advantages or make them invisible to so many Americans.

But Sanders voted yes on the ultimate bill. Jayapal did too, saying she was “incredibly proud” of the role progressives played in its passage whilst she intended to “remain vigilant” and keep pushing for more. It’s the identical promise that Wyden made, and Pelosi too — really, just about every Democrat and each ally who worked to make the prescription drug reforms a reality.

None thought it sufficient. Nearly all thought it was an enormous step forward, on the idea — and, yes, the hope — that it won’t be the last.

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