Drug Pricing and Politics

Attacks on high-priced medicines clearly play well with voters on all sides of the political spectrum and have featured prominently in political debates and policy negotiations. This discussion will continue through the rest of the year, as polls show that Americans consider healthcare and the rising cost of prescription drugs a top consumer issue. All the Democratic candidates back some kind of drug pricing legislation and are pushing cost control issues on the campaign trail, as leading Democrats in the House and Senate seek consensus on reform legislation.

A major political problem for Democrats is that President Trump has been vocal in castigating the rise in prescription drug prices, despite a lack of support from Republicans in Congress. So, the politics surrounding drug pricing legislation are murky, as House speaker Nancy Pelosi (D-Calif) may not want to hand the White House a political win by enacting drug reform legislation.

While the politics plays out, a broad range of reform measures continue to emerge, even as the pool of Democratic candidates scales back. Progressive reformers want to empower Medicare to negotiate drug prices, to link reimbursement for drugs to prices posted overseas, and to set limits on how much pharma companies can raise prices each year. More moderate proposals aim to spur competition in the pharmaceutical industry by bolstering the development of generic drugs and permitting importation of medicines from Canada and elsewhere.

The Senate Finance Committee and the House Energy & Commerce Committee have approved drug pricing packages that would generate significant savings for Medicare and Medicaid-a strong incentive for Congress to act. But several other legislative panels still have to act to move forward with a consensus measure.

Meanwhile, the legislators face tight deadlines for approving multiple appropriations bills needed to fund federal agencies for the fiscal year that begins Oct. 1, 2019, and that will be the top priority on Capitol Hill in coming months. No one wants to delay action on spending measures with disagreements over healthcare coverage and costs, which may postpone action on health reform measures.

Even so, the multitude of health reform measures emerging on Capitol Hill has accelerated lobbying action across the board, along with campaign donations to candidates from all sides. Hospitals and health plans are vigorously opposing popular proposals to limit “surprise billing” of patients. Pharma companies are anxious to halt drug reimportation, international reference pricing, and reform of curbs on Medicare price negotiations. But proposals to cap out-of-pocket outlays for prescription drugs for Medicare beneficiaries may be more attractive to industry. The trick for reformers is to maintain a distance from Trump pronouncements while developing bi-partisan consensus on legislation that can be approved before year-end.