Aug 10, 2021 - Health

Democrats' high-stakes fight against pharma

Illustration of a gavel hitting the top of a prescription pill bottle

Illustration: Sarah Grillo/Axios

Democrats' proposed expansions to health coverage and other patient-friendly policies released Monday are reliant on successfully taking on one of Washington's most powerful industries: pharmaceutical companies.

Between the lines: The way Democrats have set up their reconciliation package likely forces them to pass significant prescription drug pricing reform if they want to also pass other measures designed to make health care more affordable — a key selling point for the entire package.

Driving the news: Senate Democrats yesterday released the legislation that sets up the reconciliation process, which they plan to use to enact several health care reforms that are each individually a big deal.

  • The plan includes paid family and medical leave and an expansion of long-term care for seniors and people with disabilities.
  • It would also extend the expansion of ACA premium subsidies, fill the Medicaid coverage gap in states that haven't expanded the program, expand Medicare to include dental, hearing and vision benefits and allow Medicare to negotiate drug prices.
  • The budget resolution also calls for lowering the Medicare eligibility age, a priority of Budget Chairman Bernie Sanders. However, a senior Democratic aide characterized the measure as "unlikely" to be included in the reconciliation package.

The big picture: "The Democrat’s budget messaging has clearly become aligned with the public’s policy priority of securing greater health care affordability," said Democratic health care consultant Chris Jennings.

  • That raises the stakes for the party of failing to deliver on the package's health reforms.

State of play: Reconciliation allows Democrats to pass these reforms without a single GOP vote, but the party can't lose any senators and can only lose a handful of House members.

  • Those margins were tight to begin with. But the budget resolution released yesterday requires the Finance Committee — which controls taxes and health care financing — to save at least $1 billion through its part of the reconciliation package.
  • That means that all of the big spenders that go through Finance — or what Democrats are calling "investments" — must be more than canceled out by the savers, like new taxes and money saved through Medicare negotiations.
  • "The Finance instruction is, it really is, win or go home. They really are putting themselves in that position on every single policy," said Rodney Whitlock, a former GOP Finance Committee aide.

Some members aren't being shy about the health care policies being tied together.

  • "We will save taxpayers hundreds of billions by requiring that Medicare negotiate prescription drug prices with the pharmaceutical industry and we will use those savings to expand Medicare by covering the dental care, hearing aids and eyeglasses that seniors desperately need," Sanders said yesterday in a statement.

What we're watching: It's still unclear whether either chamber has enough Democratic votes to allow Medicare to negotiate drug prices, and the pharmaceutical industry and its allies will do everything possible to make sure the effort fails.

  • But if that happens, it could be a death sentence for the rest of the package, or at least for the popular health care elements of it.

The bottom line: "Keep a close eye on how successful Democrats are in building consensus around sweeping plans to lower drug prices," tweeted KFF's Larry Levitt.

  • "If those plans get scaled back and there are lower savings, the expansion in health care benefits and coverage will get scaled back, too."
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