By Trudy Lieberman

The forever war between America’s pharmaceutical industry and America’s public interest is approaching a climactic moment. At stake is whether Big Pharma and its allies will keep drug prices zooming upward, or whether the federal government can slow that rise by negotiating prices for some expensive drugs taken by Medicare beneficiaries. The U.S. House of Representatives is poised to vote on legislation requiring such negotiations in the next few days as a crucial element of the $3.5 trillion budget plan, and the drug industry is in overdrive to make sure that doesn’t happen.

The hope among many members of Congress is that the savings generated by the government negotiating prescription drug prices — estimated at more than $450 billion over 10 years — will be large enough to pay for the hearing, dental, and vision benefits for Medicare beneficiaries that Democrats want to add to traditional Medicare’s benefit package. In short, Democrats’ health care legislative ambitions will be in disarray if the drug pricing legislation collapses.

Twice the Senate has refused to pass the Elijah E. Cummings Lower Drug Costs Now Act, the legislation authorizing price negotiations, once in 2019 and again in 2020 when it was included in the COVID-19 legislative packages. This year the House Ways and Means Committee included the drug provisions in their committee mark-ups with the aim of putting them in the reconciliation package now awaiting legislative action in the House.

Given the gobs of lobbying money being spent by the drug industry, it has been a tough slog. “There’s nobody that doesn’t want this to happen except pharma and its allies,” says Steve Knievel, an advocate for Public Citizen’s Global Access to Medicines Program. “The popular outrage is immense. People desperately want drug pricing reform.” The barriers to achieving that, however, are equally immense. The pharmaceutical lobby is using strategy and tactics it has honed for years. This is the same industry that made sure in 2003 that the legislation that gave Medicare beneficiaries their drug benefit also prohibited the government from negotiating prices. It’s that questionable legislative compromise that is being challenged today.

David Mitchell, who founded the advocacy group Patients for Affordable Drugs, told me, “Pharma doesn’t want anything to curb its power over brand name drugs. It will do whatever it takes not to lose that special treatment to force us to pay whatever price it demands. It is the only health care sector that gets this deal. Everyone else negotiates with Medicare.” He added: “We are in the battle now. It’s mano a mano every day.”

Pharma and ideologically allied groups are also promoting the message that drug negotiations are bad public policy. Between July and early October, 10 groups opposing such negotiations, including the trade group PhRMA, have will have spent at least $23.7 million mostly in TV advertising to promote its message that drug negotiations are bad for patients. The 60 Plus Association, an organization claiming to represent seniors, ran an ad on broadcast and cable channels “I’m Sorry They Just Said No,” telling viewers Pelosi and Schumer want to cut their benefits. The American Action Network spent about $5 million also on broadcast and cable outlets warning viewers about Pelosi’s “Socialist Drug Takeover Plan.”

Three Democratic members of the House Energy and Commerce Committee voted against moving the drug provisions forward, and it’s worth noting who has donated to their respective coffers. 

The Partnership for Chronic Disease, another group that has been actively fighting Medicare drug negotiations, weighed in with this ad featuring a young woman who tells us cystic fibrosis has been part of her life for as long as she can remember, but new life changing medication has made such a big difference. “I wish our policy makers in Washington would help us fight our diseases instead of fighting our ability to access medicines and fund cures.” The Partnership has spent more than $5 million in selected states with similar messages. Its chairman is Dr. Kenneth Thorpe, who heads the department of health policy and management at Emory University’s School of Public Health. A few years ago, the consulting firm Avalere Health released a study estimating that over the next decade the federal government could spend more than $49 billion on prescriptions for just 10 different drugs. Thorpe replied in Investor’s Business Daily, “This shocking finding might prompt many to conclude that drug prices are responsible for skyrocketing health care costs. But that conclusion is unfounded.” In 2016, Thorpe laid out his own solution to get spending under control — get Americans “to target the true driver of rising costs: chronic disease.”

As I wrote in my last post, hospitals are the biggest driver of the country’s high health costs, but as we know from the many Americans who have contacted Mitchell’s group, the costs for extraordinarily high-priced drugs loom large for countless individuals and families. One of them is 68-year-old Steven Hadfield, a North Carolinian who suffers from a rare cancer and diabetes. The list price for his cancer drug Imbruvica is nearly $14,000 for a 28-day supply, and there’s no generic option. He also takes another drug called Lantus to treat his diabetes, which costs $400 each month. His says his price for Lantus has gone up 735% over the last 20 years. So far his employer’s insurance is covering the costs, but he worries what will happen when he switches over to Medicare and buys a supplement and a drug plan. “I fear for how much my medicines will cost me.”

Patient advocacy groups, well-known to many Americans who have the diseases they represent, have been largely silent on the issue of negotiating drug prices in the current debate. One would think that organizations such as the American Cancer Society, the Arthritis Foundation, and the American Diabetes Association, which speak and advocate for people with those costly diseases, would be interested in lobbying for lower drug prices. But a report Mitchell’s group released this summer shows that of the 15 groups they examined in depth at that time, none were supporting drug price negotiation. That list includes the American Diabetes Association (ADA), which did support negotiations back in 2016, but apparently is not this time around. In a statement to the House Health, Education, Labor and Pensions Committee in March, the group instead recommended a number of steps to make diabetes medications more affordable such as increasing transparency in the supply chain and cracking down on insurance practices that push patients to choose between quality and affordability. It made the same recommendations to the House Energy and Commerce Committee. In an official statement released in early June, the ADA announced it was encouraged by Biden’s “budget proposal for its prioritization of funding to support diabetes research, management, and care,” which includes requiring drugmakers to pay rebates if drug price increases “outpace inflation.” That’s hardly the same thing as giving a federal agency the power to negotiate. I asked the ADA about this change in their position on price negotiation.

“The American Diabetes Association has historically supported, and continues to advocate for, giving the federal government the ability that it lacks in Medicare Part D to negotiate drug prices,” said Lisa Murdock, senior vice president for government affairs and advocacy, in a statement. “At the same time, we support other policies to promote more competition, restrictions on outsize middleman profits in the drug and device supply chain, and other steps needed to reduce the cost of drugs to people with diabetes.”

If drug price negotiations fail to become law, and the related dental, vision, and hearing benefits for Medicare recipients sink with it, that failure might reasonably be attributed to campaign contributions — the mother’s milk of politics — and their power to sway those who make the laws. Generous campaign contributions amounting up to $1 million were handed out by Pfizer to two-thirds of Congressional members in the last election, which should give the public a glimpse of money’s strong grip on politics.

Three Democratic members of the House Energy and Commerce Committee voted against moving the drug provisions forward, and it’s worth noting who has donated to their respective coffers. The Hill reported that Rep. Scott Peters, a Democrat from San Diego, California, was the top House recipient of drug company money this year, receiving $88,550 from pharmaceutical executives and PACs. The number balloons to $860,000 if you consider his entire career in Congress. “Pfizer Inc., Eli Lilly & Co. and biopharmaceutical companies Amgen Inc. and Gilead Sciences Inc. are his leading campaign cash sources so far this election cycle,” as The Wall Street Journal reported this week. Peters couched his opposition to the bill as an effort to defend his region’s biotech economy. “All those companies employ thousands of people in my district,” Peters told the Journal. “So it’s my job to make sure that that economy continues to thrive.”

Oregon’s Rep. Kurt Schrader received nearly $615,000 from the drug industry. The Hill reported “he inherited a fortune from his grandfather, a former top executive at Pfizer.” His annual financial statement disclosed he had between $50,000 and $100,000 invested in Pfizer. Are we supposed to believe their opposition to drug price legislation is merely coincidental?

If drug price negotiations fail to become law, and the related dental, vision, and hearing benefits for Medicare recipients sink with it, that failure might reasonably be attributed to campaign contributions — the mother’s milk of politics — and their power to sway those who make the laws. 

Then there’s New York Rep. Kathleen Rice, who puzzled Congressional observers when she voted against moving the legislation out of committee. According to The American Prospect, since the 2020 election cycle, Rice has received only $8,500 from drug company PACs compared to $265,100 for Peters and $166,000 for Schrader. Yale associate professor Gregg Gonsalves recently pointed out on Twitter that a year ago Rice had tweeted she had “always put health and safety of Long Island first, whether it meant securing billions of dollars in aid for New York during the pandemic, taking on drug and insurance companies to lower the cost of health care…”. It’s fair for her constituents to ask what has changed.

With Pfizer’s recent announcement of its employee “Grassroots Mobilization” effort, even more money will likely be flowing to members of Congress. Albert Bourla, Pfizer’s CEO, called on the company’s employees to voluntarily join Pfizer’s effort to fight the legislation. Bourla said he was “particularly disappointed” that the plan backed by House Democratic leadership “will have little positive impact on patients where it really matters at the pharmacy.”

In the end, it will come down to a David versus Goliath struggle, with Mitchell’s group Patients for Affordable Drugs, the 38 million members of AARP, and 173 other grassroots groups that support price negotiations fighting the mighty drug industry, with the future price of $14,000-a-month cancer drugs hanging in the balance.  

Veteran health care journalist Trudy Lieberman is a contributing editor at the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care column.

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The high price of prescription drugs makes good election year politics. Until the death of Supreme Court Justice Ruth Bader Ginsburg muddied the future of the Affordable Care Act, drug prices were the major health policy issue going forward —outside of COVID-19. Government inaction over the high price of prescription medicines resonates with voters who are unable to keep up with constantly rising prices for their drugs.

In many parts of the country, rival candidates for Congress are playing up their prescription drug bona fides in ways I have not seen before. High drug prices are making for good politics.

In Maine, for example, Sen. Susan Collins touts a bill she passed that allows local pharmacies to counsel patients about more affordable options for their prescriptions. Her rival Sara Gideon says drug companies spend millions in Washington and keep getting their way, and promises she’ll work for her constituents — “not the drug companies.” In Montana, Republican Sen. Steve Daines, says he was “taking on Big Pharma to lower prescription drug prices” while his rival, Gov. Steve Bullock accuses Daines of giving “billions in tax breaks to them while blocking lower prices for you.”

In Arizona rivals for a Senate seat, too, have embraced drug prices as a talking point, with Republican incumbent Martha McSally “taking on China and the big pharmaceutical companies to make sure prescription drugs are safe, affordable, and made in America,” as her ad puts it. Mark Kelly, the former astronaut running against her, is more specific, saying, “Washington politicians look the other way after taking millions from drug companies. Drug companies protect their profits, and those politicians, they protect their careers.” Kelly says he isn’t taking “a dime” from any corporate PAC, and says he’ll push for Medicare to negotiate lower drug prices with drug makers and make cheaper generic drugs more available.

And in northern Minnesota, Democrat Quinn Nystrom is running for Congress with an ad that tells viewers she went to Canada to bring back insulin for a fraction of what drug companies charge here, “but Pete Stauber (her rival) went to Washington and voted against making health care prescription drugs more affordable.” She’s referring to the stalled House bill that called for Medicare to directly negotiate prices with drug companies.

Drug prices are a big issue in Minnesota, says 47-year-old Travis Paulson of Eveleth, a small town in the state’s far north. Paulson has been a Type 1 diabetic since he was 14, and serves as the managing director of the Northern Minnesota Advocacy Group, which helps Minnesotans get drugs in Canada. Since the pandemic, however, he and thousands of others using Canadian drugs have had to pay far higher prices in the U.S.

Earlier this year the Minnesota legislature passed legislation that requires drug companies to make a 30-day emergency supply of insulin available to those with an urgent need and unable to afford their medication, with a copay of no more than $35. The law was passed after the widely reported death of Minnesota resident Alec Smith, a 26-year old Type 1 diabetic who died in 2017 because he couldn’t afford his insulin. The law was slated to take effect July 1, but the drug industry sued on that day, asking a federal court to declare the law unconstitutional and prevent the state from enforcing it. “They did something I didn’t think was possible,” said Gov. Tim Waltz. “They’re more hated than COVID-19.” The law is still in effect while the challenge continues. “It had to be rewritten several times as the industry picked it apart,” Paulson said.

“It was extremely hard to pass this bill,” Paulson told me. “Minnesota has become a proving ground for what can get passed and what can’t. If they can stop us here, they can use the law to stop other states too.” Paulson himself has been featured in an ad made by the advocacy group Patients for Affordable Drugs, which has launched a seven-figure election season ad blitz this month in 15 states.

David Mitchell, who heads Patients for Affordable Drugs, told me, “We want to do everything in our power to ensure drug prices are part of the election. We are calling on people nationally in ads in 15 key states to vote for candidates who will stand up to Big Pharma and fight for lower drug prices.”

The pain and worry voiced by participants in Mitchell’s ad campaign are real. It’s hard to say the same of the various proposals President Donald Trump has announced over the past weeks to remedy one of the worst side effects of prescription drugs — super high prices. The president’s proposals appear to be little more than symbolic political gestures in the run-up to the election, designed to distract from the unchanged political realities.

Part of the actual political reality in this case includes strong measures to lower the price of drugs, like those outlined in the prescription drug legislation passed by the U.S. House a year ago. That measure called for Medicare to negotiate prices with the drug industry, a method used by many other countries to keep drug prices low. However, the consensus among academics and others who follow drug price legislation is that Americans won’t get relief from high drug prices any time soon.

“My general view is that it is very hard to fix drug pricing in the U.S. Announcements that don’t get implemented do nothing for patients.” — Dr. Peter Bach, Center for Health Policy Outcomes at Memorial Sloan-Kettering Cancer Center

The three orders Trump announced at the end of July would allow some drugs to be imported from Canada; make changes in the way discounts negotiated by pharmacy benefit managers are passed on to Medicare beneficiaries; and require government-sponsored dispensaries to make insulin and epinephrine available to low-income patients who don’t have health insurance or they have insurance with high copays. Columnist Michael Hiltzik of the Los Angeles Times points out that those dispensaries already make those drugs effectively free to patients with incomes below the poverty line.

At the time the president said he had a fourth order up his sleeve but wanted to first meet with the drug companies. “We may not need to implement the fourth executive order,” he said at the time, calling it “a very tough order.”

In mid September, however, Trump announced that the fourth order was necessary after all. It repealed the older order calling for Medicare to pay the same price for Part B drugs based on what other developed nations pay and replaced it with one that would include Part B and Part D drugs as well — the drugs Medicare beneficiaries buy themselves at the pharmacy. Under this arrangement Medicare could refuse to pay for drugs in the U.S. that cost more than what a group of other countries were paying for the same drugs. This solution is sometimes referred to as international reference pricing or “most favored nations” policy.

Academics who specialize in drug pricing policy are not betting that drug prices will fall any time soon. In fact, they continue to rise. Good Rx, a company that tracks drug prices, found that in July 42 drugs increased their prices by an average of 3.3% in July, an increase over the previous year.

“An executive order does not necessarily do anything. They lack pretty critical details, and the actual rules do not exist.” — Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy

Law professors Rachel Sachs of Washington University School of Law and Nicholas Bagley of the University of Michigan School of Law, writing in New England Journal of Medicine, note other problems with the president’s approach — particularly allowing states to import drugs from Canada. They argue, for example, that the Department of Health and Human Services “has offered very limited guidance to the states on how they might show that importation will reduce costs,” and the order raises questions of feasibility and legality. They conclude that the administration’s other executive actions on drug pricing appear to be “political theater designed to mollify the public and restive states without overly antagonizing the pharmaceutical industry.”

“An executive order does not necessarily do anything,” Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, told me. “They lack pretty critical details, and the actual rules do not exist.”

Dr. Peter Bach, who directs the Center for Health Policy Outcomes at Memorial Sloan-Kettering Cancer Center in New York City, is also dubious of the president’s executive orders. “My general view is that it is very hard to fix drug pricing in the U.S.,” he told me. “Announcements that don’t get implemented do nothing for patients.”

On Thursday, though, the president made yet another surprise announcement. He promised to send some 33 million seniors a $200 drug discount card presumably to be used to defray some of the huge out-of-pocket costs seniors (and others) have to pay for their medicines — costs that can amount to as much as 50% of the price of the drug. Such a card would hardly make a scratch for someone taking expensive medications such as Humira and Stelara for Crohn’s disease for example — these drugs can cost upwards of $20,000 for a course of treatment. “Nobody has seen these before,” Trump said. “These cards are incredible. I will always take care of our wonderful senior citizens. Joe Biden won’t be doing this.” The consumer advocacy group Public Citizen described the move as a “pathetic attempt to bribe [seniors] for their votes,” as Politico reported.

A discount card that someone might use at Target to buy garden supplies really going to lower drug prices? That’s pretty far-fetched. It so happens that in reporting this story I spoke to a 31-year old woman Jacquie Persson who lives in Waterloo, Iowa, and has suffered from Crohn’s disease since she was in her early 20s. She is also featured in one of the ads that Patients for Affordable Drugs is running during the presidential campaign. The injection she must take every four weeks costs $21,965, and her health insurance from her employer covers all but $200. “I know my situation could change at any time,” she says. She or her husband could lose their jobs and the insurance they so desperately need. That’s hardly a trivial concern in these days of the pandemic and widespread losses in employer health coverage.

A $200 discount card doesn’t begin to solve this real pocketbook issue for Persson, Paulson, and countless other Americans struggling with expensive illnesses who would still like to see the country’s political leaders offer real solutions to the high price of pharmaceuticals.

Veteran health care journalist Trudy Lieberman is a contributing editor at the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care column.

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Congress May Move to Lower Drug Prices Later this Year or Next

Maybe – just maybe – Americans will get some relief from the relentlessly rising prices of pharmaceuticals.

That, of course depends on Congress pushing back against the drug companies’ formidable lobbying machine, their generous campaign contributions, and the industry’s historical coziness with members of Congress. But this year seems different.

When you consider that the country’s spending on prescription drugs increased by 28 percent from 2011 to 2016, it’s easy to see why it’s harder for politicians to ignore the public anger over prices of life-saving medicines they can’t afford.

Iowa Sen. Charles Grassley, who heads the Senate Finance Committee and has co-sponsored a bipartisan bill to tackle drug prices, has said that passing a bill to control drug prices will be essential to Republicans’ “keeping a majority in the Senate.”

Grassley went further. “Eventually it will come down to this. There are 22 Republicans up for election this year, and if it’s like in my state … there is a great deal of disgust with the rapidly increasing prices of drugs.”

Is a breakthrough really at hand?

I checked in with David Mitchell, a former public relations executive and now a cancer patient, who has been leading a grassroots effort to challenge Congressional thinking about drug prices. Mitchell’s organization, Patients for Affordable Drugs, has heard from some 20,000 patients recounting the troubles they’ve had paying for their medicines. Many of these people have told their stories to Congress.

I’ve written about Mitchell in this space earlier and wanted to know how his organization was faring in its quest for cheaper drugs.

Mitchell was upbeat. “The fact we’ve gotten this far, and there’s still talk of getting something meaningful done is remarkable,” he said. “The anger is really boiling up, and elected officials know and feel this anger can cost them their jobs if they don’t do something.”

The issue is, he said, can a compromise be reached that will get to the president’s desk?

Drug legislation is never easy to understand so I asked Mitchell to break down the main ideas for reform and the points of contention on Capitol Hill. Here are the main elements that could find their way into a final legislative package.

Changing the patent laws would encourage market competition and make it easier for generics and biosimilar drugs – similar versions of medicines made from living microorganisms found in plant or animal cells – to come to market.

Negotiating drug prices for Medicare beneficiaries would be a huge step toward helping seniors. Recall that the 2003 law that authorized Medicare’s drug benefit prohibits Medicare from negotiating prices with pharmaceutical manufacturers.

(Thinking about health)

A bill sponsored by House Speaker Nancy Pelosi would allow Medicare to negotiate prices for the top 250 brand name drugs that are usually the most expensive and would levy steep fines for manufacturers that refuse to negotiate.

A move to cap out-of-pocket costs for seniors might encounter the least opposition from the industry, and Pelosi’s bill would limit those costs to $2,000 a year. A Senate bill introduced by Grassley and Oregon Sen. Ron Wyden caps expenses at $3,100.

“Everyone agrees that we need to fix the unlimited out-of-pocket expense under Medicare,” Mitchell says.

Pricing drugs more in line with what people in other industrialized countries pay, using a system called reference pricing, is far more controversial. U.S. drug prices are two to three times higher than those in most other nations, and a reference pricing system would lower costs for patients and lower revenue for drug companies.

Injecting more transparency into the system of pharmacy benefit managers, the middlemen between insurers and drug makers who cut secret rebate deals that determine what patients ultimately pay, would shine a light on how prices get set.

While Congress considers which of those solutions might make it into law, the pharmaceutical industry is taking no chances that things might change. Although a recent Gallup poll shows drug companies are the most poorly regarded businesses in a list of 25 industries, their PR machine is in overdrive trying to convince Congress to preserve their customary path to profits.

An epic legislative battle is in the making.

How do you think drug prices should be controlled? Write to Trudy at trudy.lieberman@gmail.com.

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