Political lessons from Biden's drug reform

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Thursday was a pretty big day for health policy — and, as it turns out, for vivid lessons about the importance of elections.

On this day, the Ministry of Health announced It had reached agreements with drugmakers to lower the prices of ten expensive drugs that millions of Medicare beneficiaries take to treat blood clots, diabetes and other serious illnesses.

The agreements were the result of a months-long negotiation process, the first in a process that will now become an annual ritual, thanks to the Inflation Reduction Act. Widely considered President Joe Biden's greatest legislative achievement, this law included several other reforms to lower drug prices. These changes are expected to result in real, tangible savings of several hundred or even several thousand dollars per year for some seniors and people with disabilities.

Today marks the second anniversary of the Inflation Reduction Act. This is one of the reasons for the timing of the announcement.

Another reason is that the Democratic Party Convention is taking place next week, with the elections just ten weeks later. And Vice President and Democratic candidate Kamala Harris wants voters link this victory to their candidacyand reminded her that she was a big supporter of the Inflation Reduction Act. In 2022, She literally cast the deciding vote while exercising her constitutional role as President of the Senate.

Harris also wants voters to know that she is willing to do more. On Friday, Harris suggested Series of reforms This would allow the government to further reduce drug prices – for example, by extending the $35 cap on insulin enshrined in the Inflation Reduction Act to apply to all purchases, not just those with Medicare.

Of course, the need for this extension is an indication that the Inflation Reduction Act represents only modest progress and that much work remains to be done when it comes to making prescription drugs truly affordable.

The new arrangements, after all, only apply to prices for people who buy drugs through Medicare. The savings will be small or nonexistent in some cases, depending on what type of drug insurance recipients have and whether the insurers that manage them already receive significant discounts. And the new prices don't take effect until Jan. 1, 2026.

You can look at the news as a reason to celebrate or to be disappointed — or, I suspect, a little of both. But however you react to it, you should also look at the news as a case study in why national and congressional elections matter, in ways that aren't always as obvious as they might seem.

The idea of ​​giving the federal government the power to negotiate drug prices, which the governments of other economically advanced countries This idea has been around at least since the 1980s. But efforts to implement it in the United States have repeatedly met with fierce resistance – from conservatives and, above all, the pharmaceutical industry.

This opposition was seen at work in 2003, when then-President George W. Bush signed the law that created the first drug benefit for Medicare. It was a Republican bill that passed with a small majority of the more conservative Democrats. Not only did the law not give the government the power to negotiate prices, it explicitly prohibited it from interfering in pricing.

Similar opposition was at work again in 2009, when then-President Barack Obama and Democratic leaders tried to pass what would become the Affordable Care Act. To avoid a fight with the pharmaceutical industry, which had scuttled previous efforts to expand insurance coverage, the law's architects promised to remove a provision that would give the federal government influence over prices.

The Obama episode was particularly telling. For a while, Democrats had a 60-seat majority in the Senate, which protected them from a filibuster. But about a third of those seats were held by conservatives, most of them from formerly Democratic states that were in the process of becoming Republican.

They tried desperately to keep their seats and frightening about major democratic legislation and strong dependent depended on the pharmaceutical industry's support for their campaigns. Had Obama and Democratic leaders not caved in to the pharmaceutical industry and the lawmakers it influenced, the Affordable Care Act would most likely never have been passed.

Over the next decade, most of those Democrats lost their seats, costing the party congressional majorities that it only regained in 2018 (in the House) and 2020 (in the Senate). The new Senate majority was the narrowest possible, at just 50 seats, but with Harris' decision, it was enough to pass budget-related legislation and, crucially, it was largely made up of members who were less conservative, less dependent on the pharmaceutical industry, or both.

Newcomers to the Senate in 2020 included two Democrats from Georgia, Jon Ossoff and Raphael Warnock; in the House, the Democratic majority included members like Elissa Slotkin of Michigan. All three represented constituencies that leaned more Democratic than Democratic, but were slowly moving in a Democratic direction. Not coincidentally, all three representatives were fully in favor of aggressive measures to lower prescription prices—and all voted yes on IRA reforms.

Still, it wasn't quite enough to pass a tough law that would set prescription drug prices. Democratic leaders had to secure the votes of (then-Democratic) Senator Kyrsten Sinema of Arizona and a group of lawmakers with ties to the pharmaceutical lobby. The price those lawmakers reached was a compromise that limited reforms — for example, limiting the scope of negotiable drugs and rejecting the expansion of some price limits beyond Medicare.

This is a valuable lesson in how even tiny, one-time changes in the outcome of the election can have large, sweeping effects on policy. It's hard to imagine that in a world where Democrats had only a handful of votes more in 2022, they could have passed significantly stronger drug pricing reforms – for example, subjecting a wider range of drugs to price negotiation or extending some of the reforms beyond Medicare.

They might even have been able to achieve some of their other policy goals, such as introducing a paid leave program or making major investments in child care.

Conversely, in a world where the factions were a little smaller, the Democrats would probably have achieved even less. Or perhaps nothing at all.

What was true in the past is as true now, in November, as it is today, and not just because so much is riding on the presidential campaign. The difference of just two or three House members or a single puny Senator could mean the difference between future legislation having much or little impact—or no impact at all.