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Illustration: Aïda Amer/Axios

The Democrats' most significant attempt to rein in health care costs in the private market— specifically prescription drug costs — is increasingly likely to fail.

Why it matters: U.S. health care costs have ballooned over the last few decades. But there's fierce industry resistance to allowing the government to step in and regulate private market prices. Plenty of lawmakers hate the idea as well.

State of play: House Democrats' prescription drug pricing plan, also known as H.R. 3, would allow Medicare to negotiate the prices of some prescription drugs. A piece of that measure would also make those prices available in the private market.

  • Moderate Democrats in both the House and Senate have made clear that they have issues with the scope of the Medicare negotiation plan, which would save the federal government hundreds of billions of dollars over a decade. Republicans generally strongly oppose Medicare negotiations.
  • Part of the controversy has been over Medicare-specific provisions of the policy, like linking the prices of drugs in the U.S. to what other countries pay for those drugs.
  • But how those negotiated prices would apply to the private market — and thus its impact on commercially insured Americans — is also a huge point of contention.

What they're saying: Allowing private plans to have access to Medicare-negotiated prices is "no longer now price negotiation — that’s price control," Sen. Bob Menendez told Axios last month.

  • "I'm not for price controls. As a country, we've never been for that," Menendez added. "Negotiation is different than price controls. Price control is when I say to a company, for anything, 'You’re going to sell your product for X.' That’s not negotiation."
  • Every Democrat in the Senate has huge sway over shaping the entire reconciliation bill. Menendez has already emerged as one of the members most skeptical of Medicare negotiations.

Where it stands: Major players ranging from President Biden to Finance Committee Chairman Ron Wyden have thrown their support behind the measure. But that won't matter if Menendez — or any other Democratic senator — is steadfastly opposed to it.

Between the lines: Medicare regulates what it pays other health care sectors, like hospitals and doctors. That means it wouldn't be unprecedented for it to cap what it pays drugmakers as well, although this could lead to fewer new drugs being developed in the future.

  • But the government doesn't regulate the prices that private insurers pay providers.
  • "Drugs are now the anomaly in Medicare," said KFF's Larry Levitt. "Extending federally negotiated drug prices to the commercial market is unprecedented, at least in the U.S. It's the norm elsewhere in the world."

Yes, but: Other big pieces of the House bill could likely still ultimately be applied to the commercial market, even if employers and other private insurers don't have access to Medicare-negotiated prices.

  • That includes the provision that limits how much drug companies can increase their prices every year.

The big picture: Several other administrations have tried — and failed — to regulate health care prices in the private market, including hospital and provider prices.

  • The industry hates the concept, and if the most recent attempt fails, it's not just the drug industry that will celebrate.
  • The measure in the House bill "sets a precedent that could lead to other public policy that might undermine private-sector negotiation," Chip Kahn, president and CEO of the Federation of American Hospitals, recently told Axios.

Go deeper

Dec 6, 2021 - Health
Axios Investigates

Documents reveal the secrecy of America's drug pricing matrix

Illustration: Aïda Amer/Axios

American businesses spend hundreds of billions of dollars a year on prescription drugs, and the bills keep getting bigger. But some of the companies promising to help rein in those costs prevent employers from looking under the hood.

Why it matters: Documents provided to Axios reveal a new layer of secrecy within the maze of American drug pricing — one in which firms that manage drug coverage for hundreds of employers, representing millions of workers, obscure the details of their work and make it difficult to figure out whether they're actually providing a good deal.

Women politicians are under siege

Photo illustration: Sarah Grillo/Axios. Photos: Kevin Dietsch, Stefani Reynolds, and Alex Wong/Getty Images

Women in Congress feel besieged and singled-out amid surging threats against lawmakers at all levels, with some frustrated more hasn't been done to halt the trend.

Why it matters: As record numbers of American women are being elected to public office, their growing political power is being met with death and rape threats, sexist and racist abuse and online disinformation. Collectively, it's discouraged women from running for office.

New report hits DOJ over lack of police shooting data

Demonstrations followed the shooting of Dijon Kizzee by Los Angeles Sheriff's deputies in 2020. Photo: David McNew/Getty Images

A new government accountability report says the Department of Justice failed to consistently publish an annual summary of police excessive force data from 2016 to 2020, as required by federal law.

Why it matters: The data is crucial for the DOJ to monitor excessive force cases, and used to investigate law enforcement agencies with patterns of abuse. The DOJ can pivot off it to pursue court action to force reforms.