A 30-Year Campaign to Control Drug Prices Faces Yet Another Failure

Democrats have made giving government the power to negotiate drug prices a central campaign theme for decades. With the power to make it happen, they may fall short yet again.

Senior Democrats insist they will continue to push for the government to negotiate lower drug prices as part of the social policy bill, but key members of their party oppose it.
Credit...Paul Ratje for The New York Times

WASHINGTON — When a powerful Democratic Senate chairman assembled his Special Committee on Aging to confront what he called a “crisis of affordability” for prescription drugs, he proposed a novel solution: allow the government to negotiate better deals for critical medications.

The year was 1989, and the idea from that chairman, former Senator David Pryor of Arkansas, touched off a drive for government drug-price negotiations that has been embraced by two generations of Democrats and one Republican president, Donald J. Trump — but now appears at risk of being left out of a sprawling domestic policy bill taking shape in Congress.

Senior Democrats insist that they have not given up the push to grant Medicare broad powers to negotiate lower drug prices as part of a once-ambitious climate change and social safety net bill that is slowly shrinking in scope. They know that the loss of the provision, promoted by President Biden on the campaign trail and in the White House, could be a particularly embarrassing defeat for the package, since it has been central to Democratic congressional campaigns for nearly three decades.

“Senate Democrats understand that after all the pledges, you’ve got to deliver,” said Senator Ron Wyden of Oregon, the chairman of the Finance Committee.

“It’s not dead,” declared Representative Richard E. Neal of Massachusetts, the chairman of the Ways and Means Committee.

But with at least three House Democrats opposing the toughest version of the measure, and at least one Senate Democrat, Kyrsten Sinema of Arizona, against it, government negotiating power appears almost certain to be curtailed, if not jettisoned. The loss would be akin to Republicans’ failure under Mr. Trump to repeal the Affordable Care Act, after solemn pledges for eight years to dismantle the health law “root and branch.”

And after so many campaign-trail promises, Democrats could be left next year with a lot of explaining to do.

“It would mean that the pharmaceutical industry, which has 1,500 paid lobbyists, the pharmaceutical industry, which made $50 billion in profits last year, the pharmaceutical industry, which pays its executives huge compensation packages, and which is spending hundreds of millions of dollars to defeat this legislation, will have won,” Senator Bernie Sanders, the Vermont independent and Budget Committee chairman, said on Wednesday. “And I intend to not allow that to happen.”

It is not clear how Mr. Sanders can pull that off. The length of the fight speaks to the durability and popularity of the issue, but also the power of the pharmaceutical industry.

Senator Pryor teed it up in the late 1980s, hoping to muscle through lower prices for Medicaid, with an eye on the bigger prize, Medicare. President Bill Clinton included government price negotiations in his universal health care plan in 1993, and throughout the 1990s, as Democrats pressed to add a prescription drug benefit for Medicare, government negotiations were central to holding the cost down.

Then in 2003, a Republican Congress and president, George W. Bush, secured passage of that drug benefit — but with an explicit prohibition on the government negotiating the price of medicines older Americans would purchase.

Credit...Saul Loeb/Agence France-Presse — Getty Images

Repealing that so-called noninterference provision has been a centerpiece of Democratic campaigns ever since. Senator Chris Van Hollen of Maryland, a former head of House Democrats’ campaign arm, recalled that “Medicare shall negotiate drug prices” was one of the six planks in the “Six for ’06” platform that helped the Democrats win control of the House in 2006.

It has passed the House numerous times, including in 2019 with yes votes from the three House members now opposing it — Representatives Kathleen Rice of New York, Scott Peters of California and Kurt Schrader of Oregon — only to die in the Senate. Even Mr. Trump adopted the effort in his 2016 campaign, only to see it go nowhere.

That futility is why Mr. Schrader said he opposed it: “Why do the same thing again and again and expect to have a different result?” he asked.

The prospect that the drug price controls could be scaled back has Democrats looking elsewhere for revenue to pay for their social policy and climate change bill.

On Thursday, negotiations continued over how to finance the measure, with White House officials and congressional Democrats discussing proposals to bolster the Internal Revenue Service’s efforts to collect unpaid taxes and to increase taxes on income earned overseas by multinational American companies. Ms. Sinema, who has rejected the idea of raising individual income or corporate tax rates, indicated that she would accept enough other revenue measures to pay for a package of up to $2 trillion over 10 years — something of a breakthrough for the total cost.

To proponents, defeat after defeat on the drug pricing measure speaks solely to the power of the pharmaceutical industry and its attendant lobbyists.

But opponents say it reflects the complexity of the issue. Advanced countries with fixed government purchase prices have seen access to medicines constrained, either by drug companies or by governments that choose their preferred medications.

That could lead to a repeat of the political problems faced after passage of the Affordable Care Act, when President Barack Obama’s promise that “if you like your doctor, you can keep your doctor” proved to be untrue. Medicare recipients could find prescriptions they have long taken suddenly unavailable.

“If anyone thinks this is the easy political route for me, that’s just laughable,” said Mr. Peters, who has endured scorn and pressure from his Democratic colleagues but whose San Diego district includes almost 1,000 biotechnology companies and 68,000 jobs directly tied to pharmaceutical work.

Mr. Schrader and Mr. Peters said the House version of prescription drug price controls, tucked into the broader social policy legislation, would stifle innovation in one of the country’s most profitable global industries.

The Pharmaceutical Research and Manufacturers of America, known as PhRMA, also maintains that government negotiations would severely limit the types of prescription drugs that would be available to Medicare beneficiaries, warning that companies would simply withdraw their products from the program. With the good will the industry has accrued with its coronavirus vaccines and treatments, drug companies have pressed their case with key lawmakers, and roped in the larger business community.

American Action Network, a conservative group with business money, unveiled a new set of ads on Wednesday targeting vulnerable Democrats such as Representative Carolyn Bourdeaux of Georgia and decrying “another socialist health care plan to control what medicines you can get.”

“We are taking on the greed and the corruption of the pharmaceutical industry — I know their power, believe me, I know their power,” Mr. Sanders said. “But this is a fight we’ve got to win.”

Credit...Al Drago for The New York Times

Mr. Wyden insisted that any legislative effort to tackle rising drug costs must include government negotiating power, but alternatives are emerging.

Some simpler solutions would change the formula of the existing Medicare prescription drug benefit to limit out-of-pocket costs, especially in the event of a catastrophic health event.

Mr. Wyden is also pressing to enact legislation he drafted with Senator Charles E. Grassley, Republican of Iowa, that would force drugmakers to offer rebates to the government on products whose prices rise faster than inflation. Mr. Grassley said he still supports the measure, as does Senator Bob Menendez, Democrat of New Jersey and a traditional ally of the pharmaceutical industry in his state.

Mr. Schrader and Mr. Peters, who oppose giving the government blanket power to negotiate drug prices, said talks were progressing around a narrower measure they proposed. Their plan would limit Medicare to bargaining down only medicines used in outpatient services — which include some of the most costly drugs, such as those used in chemotherapy — and only once those drugs had outlived their patent exclusivity.

Their bill would also force rebates for drug prices rising faster than inflation, and limit out-of-pocket medication expenses for older Americans. That is projected to save the government $300 billion over 10 years, about half what the more expansive measure would save.

“Frankly, based on discussions we’ve had with the White House, senators and other members in our party, this could get done,” Mr. Schrader said. “That’d be huge.”

Ultimately, if any significant price controls survive, it will be the logic of the policy overcoming the power over the lobby, said Representative Ron Kind, a Democrat whose Wisconsin district is being hit with pharmaceutical industry advertising. Mr. Kind, an influential centrist, said he has been speaking with like-minded Democrats, trying to buck them up against the onslaught.

“Obviously, there’s some advertising,” he said. “But boy, public sentiment is overwhelming. They just don’t understand why the pharmaceutical industry is the only private industry the federal government’s refused to even discuss prices with.”

Emily Cochrane contributed reporting. Kitty Bennett contributed research.