Budget reconciliation may be the only hope for lower drug prices
While the American people, and 400 mayors across the country, are unified in their support for pandemic relief, bipartisan legislation is seemingly doomed. With a country reeling from a pandemic and an economy in peril, Democrats have signaled that they are willing to advance most of this much-needed relief package through a decades-old budget rule — reconciliation.
Now is the time to do the same thing to lower skyrocketing drug prices, a crisis that Congress has failed to address with effective legislation despite years of promises. However, this time reconciliation can save hundreds of billions rather than create new spending.
The fix is H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, which would give the pharmaceutical industry’s single largest customer — Medicare — the power to negotiate the price it pays for drugs.
When H.R. 3 was passed by the House in December 2019, the Congressional Budget Office (CBO) calculated that allowing Medicare to negotiate drug pricing would save the federal agency $456 billion over 10 years. Nonetheless, congressional Republicans refused to even bring it up for a vote.
Now that Democrats control Congress and the White House, it is time to pass H.R. 3, and if Republicans still will not come to the table, reconciliation may be the only way.
Despite all the political polarization across the country and on Capitol Hill, Democrats, Republicans and Independents agree that prescription drugs cost too much. Two-thirds of Americans — including 62 percent of Republicans — believe lowering drug costs should be a high priority for the Biden administration.
There is also broad consensus among Democrats for the price-lowering measures in H.R. 3. House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Chuck Schumer (D-N.Y.) and President Biden have all spoken out on its behalf and Democrats made the promise of lowering prescription drug prices a central pillar of their campaign. In 2019, 33 Senators co-sponsored legislation to allow Medicare to negotiate drug prices.
On multiple occasions over the past three decades, Congress has used budget reconciliation to advance health care measures, including the Affordable Care Act, COBRA continuation coverage, and the Children’s Health Insurance Program (CHIP). The core provisions of H.R. 3 meet the standard for budget reconciliation.
Given the broad public support for Medicare price negotiation, Democrats should fight to include all H.R. 3 provisions in budget reconciliation — and any senator who moves to oppose Medicare negotiation will be accountable to their constituents.
The savings from lowered prescription drug prices would not just benefit Medicare spending and seniors’ out-of-pocket costs for prescriptions. All Americans would share in these savings since lower prices negotiated by Medicare would also be available to the private insurance market. But there’s more than just cost savings at stake here.
Without dramatic action to lower prices, more than 1.1 million Medicare beneficiaries will die prematurely over the next decade because they simply can’t afford their prescribed medications. Meanwhile, during the same 10-year period Medicare will spend an additional $177.4 billion to deal with worsening health issues that could have been avoided with better adherence to drug therapy.
Pharma lobbyists will no doubt attack the idea of lowering drug prices and mount a fierce defense of their industry’s profit margins. They’ll trot out the usual false tropes about preserving innovation by protecting profitability — without acknowledging the American lives lost due to unaffordable drugs.
Congress’s job is to take bold and decisive action to protect the lives and livelihoods of ordinary Americans — not just the profits of pharmaceutical companies and their stockholders. Millions of Americans can’t afford the drugs they need to survive. It’s well past time for Congress to come to their rescue. Using budget reconciliation now is Democrats’ chance to be the champions the American public needs.
Tim Lash, MBA, is Chief Strategy Officer and Executive Vice President of West Health, a nonpartisan, nonprofit organization focused on reducing costs and increasing access to health care, especially for our nation’s growing population of seniors.