Aug 8, 2019

How Democrats want to limit drug prices

Illustration: Rebecca Zisser/Axios

The Democratic presidential candidates' plans to lower drug prices are much more aggressive than what the party has supported in the past.

Between the lines: There are big differences among the candidates' platforms, but the entire debate has shifted to the left.

The big picture: Many of the candidates have moved beyond the party's traditional support of allowing Medicare to negotiate with drugmakers and importing drugs from Canada, embracing an even larger role for the federal government.

  • But what shape this role takes ranges from direct manufacturing to limiting price increases.

Government controls the drug: The most aggressive end of the spectrum involves having the government to manufacture drugs when they get too expensive or there's a shortage.

  • Sen. Elizabeth Warren has introduced a bill that would allow the government to manufacture generic drugs in some circumstances.
  • Andrew Yang supports a similar approach, and Mayor Pete Buttigieg recently told AARP that he "potentially" supports allowing the government to make generics.

Government seizes the patent for the drug: Other candidates stop short of having the government directly manufacture the drug, but would allow it to strip a drugmaker of its patent if it's too expensive.

  • Candidates with proposals falling in this bucket include Sen. Bernie Sanders, Sen. Kamala Harris, Sen. Cory Booker and former Rep. Beto O'Rourke.

Government determines the price of the drug: The U.S. doesn't regulate what drug manufacturers can charge for drugs, but some candidates want to start doing so.

  • Another enforcement mechanism endorsed by some candidates is taxing profits above a drug's allowed price at 100%. Harris has proposed the method in a component of her pricing plan, as has former Rep. John Delaney.

Reference pricing: One way to set a drug's price is based on what other countries pay, with penalties to the drug companies when we pay more.

  • This is part of Sanders', Harris', and Former Vice President Joe Biden's plans.

Value-based pricing: Another way that candidates want to determine a drug's price is based on its value, a method many other countries use but America doesn't.

  • Biden's plan also includes this method in some cases.

Government regulates price increases: Drug companies are currently free to raise their prices over time as much as they want to, as long as they can get insurers to agree to pay for them. Some candidates want to change that.

  • Biden's plan prohibits drug companies from raising their prices above inflation, and price increases above inflation are a trigger for price-setting in Harris' plan.

A sign of the times: The Trump administration relies on reference pricing in its proposal to limit what Medicare Part B pays for drugs, and a Senate committee just passed a bipartisan bill that would limit Medicare price increases.

The bottom line: The party's leftward drift corresponds with the the drug industry's evolution toward more complicated and thus more expensive drugs. But regardless, most of these ideas would be a huge change from the status quo.

Go deeper

The fight over the future of our most expensive drugs

Illustration: Sarah Grillo/Axios

The market designed to create competition for biologics — typically our most expensive drugs — has been slow to take off, but some experts say that even its best-case scenario doesn't do enough to lower drug prices.

Why it matters: While wonks debate the future of biosimilars in policy journals and on editorial pages, the argument is reflected in the political divide over whether enhanced drug competition or price regulation is the best way to address drug prices.

Go deeperArrowAug 26, 2019

The great Democratic gamble

Illustration: Aïda Amer/Axios

Democrats are increasingly taking far-left positions most would not have dreamed of — or dared — taking three short years ago.

Why it matters: A convergence of incentives — fundraising, cable coverage, liberal activism and social media — are inspiring Democrats to offer full-throated support of big government liberalism. The result would make Hillary Clinton and former President Obama sound like conservative Democrats in this field.

Go deeperArrowAug 28, 2019

The 2020 candidates who have qualified for the next Democratic debate

Cory Booker, Kamala Harris, Pete Buttigieg and Elizabeth Warren. Photos: Scott Olson/Getty Images, Jim Watson/AFP/Getty Images, and Brendan Smialowski/AFP/Getty Images

The fourth round of Democratic debates will be held on Oct. 15 in Westerville, Ohio, with 12 candidates onstage, making it the biggest single-night debate to date. 

How it works: This debate had the same requirements as September's. Qualifying candidates must have reached 2% in 4 DNC-approved polls and drawn 130,000 unique donors — including 400 donors in 20 different states. Oct. 1 was the final day to make the cut.

Go deeperArrowUpdated Oct 2, 2019