Consumers Lose Again
By Stephen Tuttle | Nov. 6, 2021
The Build Back Better legislation, President Joe Biden's $3.5 trillion social program and climate legislation, is no more. It was maimed, dismembered, and chopped in half by the whining, quibbling, and obstructing interference of Democrat Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Some of us will be the poorer for it.
There are still plenty of goodies in the legislation: $1.75 trillion is a lot of new spending. It extends the enhanced child tax credit for another year, creates free and universal pre-school for 3- and 4-year-olds, spends half a trillion in climate-change-related initiatives, expands Medicaid, and reduces Affordable Care Act premiums, plus commits $150 billion to affordable housing.
The bill intends to pay for all this with a mini-blizzard of tax increases on the wealthy, the very wealthy, and corporations.
Eliminated during the budgetary bloodletting was free community college for two years, paid family and sick leave, Medicare dental and vision coverage, and the so-called Billionaire's Income Tax to help pay for things. Most notably, negotiating drug prices for Medicare, a key element of the original bill that would have been the most beneficial for the most people, was cut, a nearly two-decade gift to the pharmaceutical industry.
The Medicare Modernization Act of 2003 created the Medicare Part D drug coverage, but it also prohibited the federal government from negotiating drug prices for Medicare. They can haggle over drug prices for the Veteran's Administration and Medicaid but not Medicare.
The money involved is significant because those eligible to enroll in Medicare comprise about 16 percent of the population but consume 35 percent of all the prescription drugs. And since Americans pop more pills than the rest of the world combined, we're talking about lots of drugs.
So, how can the most logical way to save tens of millions of Americans significant amounts of money end up being outlawed? The easy answer: money. As the MMA was being negotiated on the floor of the U.S. House, pharmaceutical industry lobbyists swarmed the floor, making threats and promises. Cameras covering the House floor were turned off during the unseemly display. The lobbyists claimed companies would go out of business and lifesaving drugs would never be developed if their pricing was somehow restricted.
(It turns out the vast amounts spent on research and development of new drugs is actually less than 9 out of the top 10 drug manufacturers spent annually on advertising and promotion.)
The result is we pay at least three times and up to 10 times more than our Western European friends, all of whom negotiate with the same companies with which our law prevents us from engaging.
Our prescription drug prices have increased more than inflation every year since MMA passed. This impacts all of us, not just Medicare enrollees, because we are all paying for those inflated prices with our tax dollars and our own prescription costs. Some of those costs give us the grim choice of debt or death.
For example, according to the Kaiser Family Foundation, the 54 most prescribed orally administered cancer drugs in the U.S. had price increases of more than 40 percent in the last decade. The average cost for those drugs is now $167,000 a year per patient. Prices for the drugs most often prescribed for Medicare patients for blood pressure, cholesterol, and heart ailments have increased about the same in the last decade. About 70 percent of the 62.6 million Americans now enrolled in Medicare have some form of Part D drug coverage, so we're all paying for those price increases, with no way to keep the prices down.
In another example, the FDA just approved an Alzheimer's drug called Aduhelm. It might work to prevent the destructive plaque build-up for patients whose illness is detected early enough. Since it requires a monthly infusion delivered by a doctor, it will be covered by Medicare Part B. The cost? $56,000 a year per patient.
The annual winners — the corporations with the best lobbyists and billionaires with the best lawyers — have won again.
The losers are every consumer who ever needs a prescription drug, and especially seniors on Medicare who use, on average, 4.7 prescriptions a month. We should all send our sarcastic thanks to Senators Manchin and Sinema for standing in the way of common sense. A cynic might suggest their receipt of substantial campaign contributions from pharmaceutical interests during their political careers — $500,000 for Sinema, $700,000 for Manchin — influenced their decision.
The other obvious loser is President Biden, who allowed two outlier senators of his own party to control and alter what he had hoped would be his signature accomplishment. His inability to generate sufficient support for drug-cost negotiations demonstrated political weakness that will serve neither him nor the country well.