Medicare Drug Price Negotiations and Importation in the Spotlight

Posted at 7:23 PM on Jun 14, 2021


GL Headshot Online Feb 22 2018.jpgBy Gabriel Levitt, Prescription Justice Board of Directors Chairman

Medicare drug price negotiations and drug importation have been the two big elephants in the room as public policies to finally bring drug prices down and in line with other high-income countries. Legislation for both is routinely and vigorously swatted down by the pharmaceutical industry lobbying juggernaut with billions of dollars over the past two decades. Those two policies would have the largest impact on ending the industry’s ability to hold America hostage on prices when it comes to patented medications. The top 60 such drugs cost almost 400% more in the U.S. than other rich countries.

It was our hope here at Prescription Justice that the Biden administration would include provisions of the re-introduced Elijah E. Cummings Lower Drug Costs Now Act H.R. 3, which calls for Medicare drug price negotiations, in the American Families Plan. That did not come to pass. However, President Biden did state unequivocally before a joint session of Congress that it’s time to allow Medicare to negotiate drug prices. President Biden stated: “Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower drug prescription price.”  He went on to state, “let’s get it done” – implying that he would sign a bill making it law were it to come across its desk. But will it?

In 2019, H.R. 3 passed the House 230-192. Out of 232 Democrats, 228 voted yes and the other four did not vote. Only two Republicans voted yes. With Democrats holding a slimmer majority this Congress, they can’t afford to lose any votes. Last month, a troubling letter was sent from ten Democrats to Speaker Nancy Pelosi indicating dissension in the ranks. The letter did not disown Medicare drug price negotiations of H.R. 3, but it might as well have. It politely asserted that a bipartisan and bi-cameral solution is needed, one that is the product of collaboration between Congress and “stakeholders.” Stakeholders can include civil society and the non-profit organizations advocating for lower drug prices, but the letter, which was clear in its praise of pharmaceutical innovation, meant drug industry stakeholders, aka Big Pharma. Since Big Pharma is wildly opposed to Medicare drug price negotiations, it seems that these 10 Democrats are defecting.

Eight out of 10 of those Democrats voted for H.R. 3 in 2019. One of them, Rep. Scott Peters of California, stated that he only voted for H.R. 3 because he knew it wouldn’t pass, according to Politico. He said the vote was “start a conversation about lowering the cost of prescription drugs.” As if we needed more talk! It’s incredible that Rep. Peters openly admitted why he voted for H.R. but that he is defecting is no surprise. Out of the 435 members of the House, Rep. Peters ranked 5th in the amount of money he took from Big Pharma.

These defections complicate our mission to get more Republicans on board to support Medicare drug price negotiations. On an upbeat note, the Biden administration’s release of its annual budget at the end of May reups its commitment to Medicare drug price negotiations, stating that it “supports reforms that would bring down drug prices by letting Medicare negotiate payment for certain high-cost drugs.”

That same day, May 28th, the Biden administration stood up to the pharmaceutical industry by filing a motion to dismiss a lawsuit against a federal rule issued by the Department of Health and Human Services allowing drug importation from Canada brought by the Pharmaceutical Researchers and Manufacturers of America (PhRMA), and its allies the Partnership for Safe Medicines (PSM) and the Council for Affordable Health Coverage. In short, under the Trump administration, then HHS Secretary Alex Azar certified under Section 804 of the Food, Drug and Cosmetic Act, that drug importation from Canada is safe and would lead to prescription drugs savings. HHS then issued a final rule, which became effective on November 30, 2021, setting the parameters for regulating the imports. PhRMA filed its lawsuit on November 23, 2021, claiming that the certification and the final rule violate federal laws and will cause injury to drug companies.

The Biden administration could have dropped the case, conceding victory to the industry. It chose to fight but in a highly ambivalent manner. Politico’s article on the issue was titled Biden administration sides with Florida on Canadian drug imports. Florida, along with several other states, have passed laws to create state-based wholesale drug importation programs. Florida’s program seems to be farthest along and its Republican governor, Ron DeSantis, is calling on the Biden administration to approve its program. Kaiser Health News’s coverage was titled Biden Administration Signals It’s in No Rush to Allow Canadian Drug Imports. While the Biden administration defends its executive authority to issue the certification under Section 804, it bases the motion to dismiss on the fact that no importation program has actually been approved or begun and there was no timetable for it to happen. 

We believe it should happen as soon as possible. Prescription Justice strongly supports drug importation as an important component of lowering drug prices, including Florida’s and other state laws. If H.R. 3 becomes law, then, overtime, there would be less need for importation. In our statement of support for H.R. 3, we recommend including provisions to expressly allow personal drug importation because it can empower Americans who are still falling through the cracks of our healthcare system to afford needed medications.

As a reminder, in 2009, Medicare drug price negotiations and drug importation were the two policies that the Obama administration kicked to the curb to obtain Big Pharma’s support for Obamacare. I’m glad we got tens of millions more Americans insured in the intervening years but let’s actually stand up to Big Pharma this time. Millions of Americans are skipping medications because of cost. Drug prices are a crisis that we must end now.

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