“HR 3! HR 3!” These chants rang out from Democrats in the House of Representatives during the 2020 State of the Union address. The 3-letter moniker was a reference to House Resolution 3, the Democrats’ comprehensive plan to reform and lower drug prices in the United States, and it illustrated the centrality of the debate over prescription drug pricing reform to the Democrats’ agenda.
Prescription drugs in the United States are nearly 2.5 times as expensive as in comparable developed nations. The result has been a decade of unaffordable medications and unpredictable price spikes for many of the most common drugs. A sizable portion of Americans, especially in poor and low-income groups, are often unable to afford life-saving medications or may need to sacrifice essential items like food or housing to do so. The result is that a significant majority of Americans say that drug prices are unreasonably high.
Given this saliency, efforts to lower prescription drug pricing have been a central piece of the Democrats’ agenda. In 2018, a renewed focus on lowering drug prices was integral to the victories of Democratic incumbents in several swing districts across the country. In 2020, lowering prescription drug prices was one of the top healthcare-related issues for 9 out of 10 voters in the nation. Even now, in 2021, cutting prescription drug prices is amongst the most popular policies the party has, with a record 88% of all voters supporting broad efforts to allow the federal government to lower drug prices.
At a time when Democratic majorities in the House and Senate are surviving by the thinnest of margins and the party is looking for wins after months of chaotic infighting, it might be expected that the party’s decade-old promise of cutting prescription drugs would be an easy way for Democrats to shore up their base and show their chops on domestic governance. Yet, when the time to pass legislation came, an obscure and bitter fight between progressive and moderate Democrats drove this key part of the Democratic health agenda into the ground, leaving many confused, divided, and uncertain for the future.
The Unstoppable Force
The centerpiece of the Democratic effort to lower high drug prices has been a single policy: allowing Medicare to negotiate down the price of medications. At present, statutory law prevents Medicare from negotiating lower prices for prescription drugs. Instead, Medicare is forced to accept higher prices set by drug companies and pharmacies. The result has been a massive expense for the federal government, with $350 billion extra spent on higher-than-average prices last year alone.
Medicare price negotiation, therefore, was included as part of a number of reforms in the Democrats’ major prescription drug pricing reform bill formerly known as HR 3. The bill also contained a number of other provisions to lower drug prices, ranging from tying domestic drug prices with international drug prices to capping out-of-pocket payments made by patients for prescription drugs. Critics argued that HR 3 amounted to government-run price controls and that the bill would hamper future pharmaceutical innovation, a claim that many academics and Democrats question.
Nevertheless, in spite of the debate over HR 3, Democrats appeared broadly united in supporting the bill. Before the 2020 election, the Democratic House Majority passed HR 3, and support in the Senate for drug pricing reform was prominent as well. After the Democratic wave in the 2018 midterms, the prominence of the bill to Democratic efforts to retake swing districts made many feel that HR 3 was an unstoppable force — a bill that would fly through Congress — if the Democrats ever could take Congress back.
The Immovable Object
Yet, when Democrats did retake Congress in 2020, the situation changed dramatically. Despite high hopes of passing pricing reforms, the unstoppable force of HR 3 appears to have met with an immovable object: centrist opposition. Centrist House Democrats on the House Energy and Commerce Committee blocked the passage of a bill similar to HR 3, siding with Republicans. Moments later, Sens. Joe Manchin and Kyrsten Sinema also announced their opposition to the measure. This move shocked many observers, as many of these centrist Democrats had previously supported HR 3 or its Senate counterpart.
What drove this flip-flop in this behavior? No one in Washington can quite agree. Centrist Democrats, like Rep. Kathleen Rice, argued that bills to allow Medicare to negotiate prescription drug prices would be too extreme and harmful for the pharmaceutical industry. Such measures, they argued, would prevent pharmaceutical companies from bringing new and effective drugs to market, hampering innovation and progress in scientific fields.
Progressives, however, have had a more cynical response. Many progressive organizations and publications, like The Nation, have argued that centrist opposition is driven by two factors. First, many such groups cite the donor lists of these centrist Democrats, many of whom may need to rely on funding from pharmaceutical groups in future electoral races. Second, many have argued that centrist Democrats are worried about the partisan reaction for their electoral futures, fearing a conservative backlash in the 2022 midterms.
Which of these answers explains the motivations of centrists is impossible to know for sure. But the situation nevertheless alarmed House and Senate Democratic leadership, who proceeded to start large-scale lobbying efforts to the centrists, even bringing Joe Biden to talk about the measure. Many are also in talks with centrists to discuss limiting the scope of drug pricing reforms, such as limiting by which drug prices could be negotiated in the long run. Whether these proposals will flip any of the centrists is unknown. This chaos leaves the Democrats’ drug pricing reform efforts adrift, with little clarity on the horizon.
An Uncertain Future
Washington’s uncertainty about the future of drug pricing reform holds key political and economic implications for the nation at large. On a consumer level, a failure to pass drug pricing reforms will allow drug prices to rise at a time when many families have suffered economic devastation from the pandemic. The result is that many individuals may avoid taking their needed medications, resulting in serious health harm to some of the sickest members of American society.
Politically, the uncertainty in Democrats’ drug pricing reforms is likely to hurt the party as well. To the Democratic base, a failure to pass drug pricing reform will reduce voter energy, as many believe the party is unable to carry out its core promises even with control of the Senate, House, and White House. For swing voters and independents, a failure to pass drug pricing reform will likely have a similar impact — especially with seniors, many of whom take prescription drugs. Senior voters are the most likely to turn out in the 2022 midterms, so a collapse of Democratic support with this key demographic could create serious political trouble.
Passing drug pricing policy would also create much-needed confidence in President Joe Biden at a time when it is already declining. Democrats need a win to show their effectiveness in governing. Failures on drug pricing could also fuel the broader collapse of intra-party negotiations on the 3.5 trillion dollar reconciliation bill, as progressives would be likely to vote down any bill without sufficient arrangements to lower drug prices.
Given the severe consequences of failure, Democrats, therefore, must find a way to pass some piece of substantive prescription drug pricing reform, and a few solutions lie ahead. On one point, Democratic leadership could attempt to make strategic concessions on other less important policy proposals to encourage moderates to pass the drug pricing provisions, though progressives may scowl at these moves. Additionally, Senate Majority Leader Chuck Schumer and Speaker of the House Nancy Pelosi could attempt to force the moderates’ hand by piling on pressure within the party. However, this pressure could also exacerbate interparty tensions at a time when the party is seeking broader agreement on a major spending package.
With these risks, it is critical that Democrats chart out a safe and stable course on the issue of drug pricing. The party will need to ensure it can create a bill that centrists and progressives can agree on while also ensuring that the bill itself is efficacious at lowering drug prices. Anything less than success risks both weakening the Democrats’ hand ahead of the 2022 midterms while also failing to alleviate the plight of millions of Americans with costly prescription drugs. Whatever path they choose, Democrats will need to thread the needle carefully — or risk a murkier future.
Image by Christina Victoria Craft is licensed under the Unsplash License.
