Big Pharma Seeks to Crush Medicare Drug Price Negotiations
Our Pay-to-Play Supreme Court Is Their Ace in the Hole
Today is the day Medicare announced its list of 10 prescribed drugs whose costs will be negotiated with pharmaceutical companies who make them.
On the surface this might sound silly, as in “What do you mean Medicare can’t negotiate drug prices?” After all, the Department of Veterans Affairs (VA) negotiates drug prices on behalf of all federal purchasers, except Medicare Part D.
The drug companies have long protected themselves from having to compete price wise with their biggest customer; up until now MediCare was explicitly barred from direct negotiations with manufacturers. It was the price paid for the industry not opposing Medicare Part D in 2003.
Ending this death grip on US consumers has been a long-time goal for progressives, who’ve had to deal with “moderate” Democrats as well as Republicans.
The drugs on today’s list accounted for more than $50 billion in Medicare prescription drug costs between June 1, 2022, and May 31, according to the Centers for Medicare and Medicaid Services, or CMS. Administration officials say 8.2 million people with Medicare Part D prescription drug coverage are taking these medicines.
Drug Prices to be negotiated:
Eliquis, for preventing strokes and blood clots, from Bristol Myers Squibb and Pfizer
Jardiance, for diabetes and heart failure, from Boehringer Ingelheim and Eli Lilly
Xarelto, for preventing strokes and blood clots, from Johnson & Johnson
Januvia, for diabetes, from Merck
Farxiga, for diabetes, heart failure and chronic kidney disease, from AstraZeneca
Entresto, for heart failure, from Novartis
Enbrel, for arthritis and other autoimmune conditions, from Amgen
Imbruvica, for blood cancers, from AbbVie and Johnson & Johnson
Stelara, for Crohn’s disease, from Johnson & Johnson
Fiasp and NovoLog insulin products, for diabetes, from Novo Nordisk
Like many theoretically good things coming out of DC, the price of legislative passage is easily overlooked. The idea of a 10 drug limit subject to negotiation came from Democrats Scott Peters (CA), Kurt Schrader (Ore) and Kathleen Rice (NY) via their complaints about an earlier form of this legislation as part of the Biden administration’s unsuccessful effort with the “Build Back Better” plan.
From the Los Angeles Times two years ago:
The prescription drug policy is key to the rest of Democrats’ plans because it would bring in an estimated $700 billion over a decade that would be used to shore up other parts of the healthcare system, such as Medicare and the 2010 Affordable Care Act, often called Obamacare.
Rep. Scott Peters (D-San Diego) is leading the opposition to Democrats’ existing plan, arguing that it would decimate investment in the pharmaceutical industry and threaten jobs, including about 27,000 in San Diego.
“The promise we made was to lower drug prices, to negotiate with drug manufacturers,” Peters said of Democrats’ decade-long pledge to voters. “We did not promise to kill the goose that lays the golden egg.”
The presumption of competition being a factor in capitalism in the US only applies when it’s convenient. This applies to the stranglehold Big Pharma, along with the Medical Industrial Complex, has on Americans whenever the word “jobs” is invoked.
Purported impacts on employment in the industry are not measured by any objective measure that I can find. It’s mostly a matter of industry executives whining and legislators pulling doomsday threats out of their posteriors. And if it were true, the logical compromise -as has happened with other major legislation- would be for mitigating factors about jobs to be included in the legislation.
No Republicans voted for the Inflation Reduction Act. Big Pharma is aiming to make its case before a tarnished Supreme Court.
From the New York Times:
The suits make similar and overlapping claims that the drug pricing provisions are unconstitutional. They are scattered in federal courts around the country — a tactic that experts say gives the industry a better chance of obtaining conflicting rulings that will put the legal challenges on a fast track to a business-friendly Supreme Court.
If the administration prevails in the four drug company lawsuits (plus two more from the industry’s trade association and the US Chamber of Commerce), reduced drug prices will not take effect until 2026.
The industry trade group, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, is running advertisements targeting pharmacy benefit managers, and industry executives are publicly arguing that the drug pricing provisions will lead to fewer cures. They’re making an argument that lower prices will discourage companies from developing certain drugs.
The Chamber of Commerce is hoping to get a court-ordered injunction against the program by Oct 1, the date this program ramps up.
Via Reuters:
Drugmakers have until Oct. 1 to agree to the negotiations. If they refuse, they face heavy fines. By Oct. 2, they must hand over extensive data the government requires to come up with its proposed lower prices.
Medicare plans to send its first offers to manufacturers by Feb. 1. They will have 30 days to make counteroffers. The negotiations must end by Aug. 1, and Medicare will publish its list of new prices on Sept. 1. The law requires that negotiated prices be at least 25% lower than the original list prices.
The process will begin again in February of 2025, when CMS selects another 15 costly prescription drugs for negotiations, with new prices on those going into effect in 2027. It will add yet another 15 prescription or doctor-administered medicines - those not dispensed by pharmacies - the following year.
After that, Medicare will barter for prices on 20 prescription or doctor-administered medicines each year.
This plan for lowering drug costs is fragile, meaning that a shift away from Democrats controlling the Senate and the White House will scuttle it.
Republicans have a plan for 2025, shepherded by the Heritage Foundation, which lays out a fundamental shift in the federal government— moving federal agencies away from public health protections and environmental regulations in order to help the industries they have been tasked with overseeing.
Via E&E News by Politico:
“Project 2025 is not a white paper. We are not tinkering at the edges. We are writing a battle plan, and we are marshaling our forces,” said Paul Dans, director of Project 2025 at the Heritage Foundation, which compiled the plan as a road map for the first 180 days of the next GOP administration. “Never before has the whole conservative movement banded together to systematically prepare to take power day one and deconstruct the administrative state.”
The initiative has previously drawn attention for its efforts to prepare a systematic conservative takeover of the federal bureaucracy, in contrast to the perceptions of chaos that marked much of former President Donald Trump’s term. Those include plans to assemble a database of as many as 20,000 people who could serve in the next administration — “a right-wing LinkedIn,” as The New York Times described it in April — and proposals to impose sweeping Oval Office control over spending decisions, civil service employees and independent federal agencies.
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Noteworthy News Niblets for Tuesday
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Trump’s Trial Set to Start March 4, 2024 (235 years to the day when the US Constitution became the law of the land…) Letters from An American by Heather Cox Richardson
Those charges are not about anything Trump said. The 45-page indictment acknowledges Trump’s right to speak about the election and even to lie that he had won, and the Department of Justice did not charge him with incitement. The indictment charges Trump with being part of three conspiracies: one to defraud the United States by “using dishonesty, fraud, and deceit” to stop the lawful government function of determining the results of a presidential election, a second conspiracy to obstruct the lawful January 6 congressional proceeding to count and certify the results of the presidential election, and a third conspiracy to take away from other Americans “a right and privilege secured to them by the Constitution and laws of the United States—that is, the right to vote and to have one’s vote counted.”
Department of Justice special counsel Jack Smith’s office had asked the judge for a January 2 start date, saying the date “serves the public’s interest and the interests of justice, while also protecting the defendant’s rights and ability to prepare for trial.” (A Politico Magazine/Ipsos poll from August 18–21 bears out this position: it shows that 61% of the American people believe that Trump should go to trial for election subversion before the Republican primaries.)
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Housing Is a Labor Issue Via Hamilton Nolan’s How Things Work
The problem is that, in city after city, the supply of housing has failed to keep up with demand, largely because existing homeowners as a class prefer not to see a bunch of construction around them messing up their nice neighborhoods. Estimates of America’s total housing shortage range from three to seven million units (with much of the need in the cities where people want to live the most), but experts all agree that the amount we need to build is “enormous.”
This is a problem that hurts non-rich people more than anyone. That means it’s a labor problem. Working class renters suffer more than any other group. Landlords have a siphon directly into their wallets. They can demand high rents because people don’t have anywhere else to live because there are not enough units for people to live in.
Vox last week published a good story by Rachel Cohen detailing how the Carpenters and other building trade unions in California slowly came around to the YIMBY position of supporting legislation to make it far easier to build housing in that unaffordable state—a position that clashed with the traditional position of the building trade unions, which focused exclusively on how much the construction would be of direct benefit to their members. Teachers unions and SEIU, representing low wage workers, are supporting the bills that make it easier to build as well.
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Karine Jean-Pierre dumbstruck by Peter Doocy for asking if Biden wants to 'limit beer' in the US Via Raw Story. A tale about the idiot from Fox News in the White House daily briefing.
“Dr. George Koob, who is the director of the National Institute of Alcohol Abuse and Alcoholism, says the U.S. may soon follow Canada and recommend just two beers a week. How do you guys think that’s gonna go?” Doocy asked.
“Let me tell you what – I’m not gonna get involved in, in that question right there,” Jean-Pierre, smiling, replied. “I have no idea, I’ve not seen the data. I cannot speak to this. I will leave it to the experts and not weigh in.”
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