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Medicare drug prices could go down — but these Democrats say no

The Democrats' popular drug prescription reform plan faces unexpected dissent.

A major policy in the debate over the $3.5 trillion budget package should have been an easy decision for Democrats — the plan to let Medicare negotiate for lower prescription drug costs is incredibly population nationwide. But three Democrats voted against the policy in a House Energy and Commerce Committee vote Wednesday, bucking their party in a shocking move, and foreshadowing a potential showdown over the final bill.

The act of dissent highlights the precarity of the Democrats’ budget package.

The act of dissent highlights the precarity of the Democrats’ budget package, which can only afford three Democratic defections if all Republicans oppose it, as they're expected to do. And it drives home how powerful special interests like the pharmaceutical industry can exploit that fragile majority and derail policies that should be a no-brainer for the Democrats.

The purpose of the drug pricing policy is to pay for a host of new health care policies, including additional subsidies for people buying health care in state health exchanges, extra aid for uninsured poor Americans, and adding dental, hearing and vision benefits to Medicare. The way it works is that it allows the government to restrict the maximum price that drug companies can charge for insulin and a set of expensive drugs that don’t face competition, and generate savings by forcing pharmaceutical companies to take the hit — the measure could save the government $500 billion over a decade. It’s an extremely popular policy with support from voters in both parties.

But Democratic Reps. Scott Peters of California, Kurt Schrader of Oregon and Kathleen Rice of New York joined Republicans and voted against the drug price provision on Wednesday, causing a deadlock on the House, Energy and Commerce Committee and preventing it from passing through the panel. That didn’t kill the provision — it advanced through the Ways and Means Committee later that day. But it did shine light on a problem that isn’t necessarily going away.

Peters, Schrader and Rice, along with two other Democrats, have signed onto alternative legislation which calls for much less aggressive and narrower negotiation for drug prices.

As The American Prospect’s David Dayen explains, this alternative provision is a win for the pharmaceutical industry:

On the all-important issue of Medicare negotiation with drug companies, the Peters bill only allows negotiation on drugs that have gone off-patent but have no generic competition. This preserves the patent monopolies that keep drug prices exorbitantly high in the United States, since there is no current check on costs. Restricting negotiation to off-patent drugs and restricting the inflation cap to Medicare just allows drug companies to keep excess profits. It also reduces the amount of money available to offset spending in the bill.

The five Democrats who support that bill could pose a major problem for Democratic leadership, because collectively they could hold the entire budget package hostage over the provision.

Now standoffs over specific provisions are a standard part of the legislative process. What makes this particular one so alarming and frustrating is that there is simply no good reason for it. Ninety percent or more of voters from Peters’, Schrader’s and Rice’s districts support the Democrats’ main plan to lower prescription drug prices.

The measure could save the government $500 billion over a decade.

This is a policy that polls well nationally across the political spectrum, and in fact Democrats in vulnerable House districts have pushed for the main drug price reform policy precisely because they view it as an easy way to appeal to non-Democrats. (The five Democrats pushing for alternative legislation are in safe seats.)

So what drove the Peters, Schrader and Rice defection on Wednesday? Donors likely played a huge role, as Jacobin reports:

Schrader and Peters are among the two biggest recent Democratic recipients of pharmaceutical industry donations, according to OpenSecrets. The pharmaceutical and health products industries are collectively the second biggest donor to both lawmakers over the course of their careers, giving them almost $1.5 million in total. Peters is currently the House’s top recipient of pharmaceutical industry donations in the 2022 election cycle.

Rice isn't the same kind of beneficiary of pharmaceutical donors, but she has received $8,500 from the industry since 2020. She also tends to vote more conservatively than most of her caucus in general.

Ultimately all three of these lawmakers are taking positions that are distinctly unpopular at the national level and within their districts. While they’re being referred to as “moderates” in mainstream news accounts, their position is in fact extreme — at odds with national sentiment and common sense on policy.

In the world of politics, sometimes a good policy is a hard political sell, and a politician is forced to make difficult decisions about whether passing that policy is worth the cost in popularity or political capital. But sometimes a policy is in fact good politics — both improving the world and benefiting the politician or their party. Passing up an opportunity to enact the latter is a huge unforced error.

The Democrats have long campaigned on reducing the price of prescription drugs. If they can’t deliver on this, their already grim prospects in the 2022 midterms may look even worse.