Public outrage over the rising cost of pharmaceutical drugs is poised to shape the upcoming midterm elections while bolstering support for a single-payer health care system.
A recent poll by the Kaiser Family Foundation shows that 52 percent of the public says passing legislation to bring down prescription drug costs should be Congress’s top priority, followed closely by passing an infrastructure bill to improve roads and bridges and addressing the opioid epidemic. More than three quarters of respondents said the Trump administration and lawmakers in both parties are not doing enough to bring down the cost of drugs.
“Anyone who stands in the way of lower drug prices should be terrified of [the poll] results,” said Ben Wakana, the executive director of Patients for Affordable Drugs, in a statement released in response to the Kaiser poll.
It’s no secret that consumers are angry about rising drug prices and health care costs in general. The Pew Research Center recently found that 53 percent of respondents said health care costs affect their household financial situation “a lot.” The Kaiser poll shows that a growing majority of Americans — 59 percent — now favor transitioning to a single-payer health care system, an idea once considered radical before former presidential candidate Sen. Bernie Sanders championed Medicare for All on the campaign trail amid mounting public frustration. Other polls show that support for single-payer has grown steadily over the past two years.
However, Vikas Saini, president of the nonprofit Lown Institute and an activist with the Right Care Alliance, a grassroots coalition that supports building a nonprofit health system, said that transitioning to a single-payer system alone would not bring down drug prices. In fact, the government could pay a hefty price tag for drugs without major changes to the system for delivering drugs to patients.
“[We won’t] see changes in the guts of the delivery system … without a lot more reorganization and a lot more really grassroots activism,” Saini told Truthout in an interview. “So, for us, we are all in favor of a transformed system, but fundamentally it needs to be nonprofit … and while the financing is national, it needs to be accountable to local communities.”
Sanders, various other lawmakers and even President Trump have railed against high drug prices, but voters are skeptical of their willingness to stand up to the powerful industries that shape drug costs. The Kaiser poll found that 72 percent say pharmaceutical companies have “too much influence” in Washington, followed closely by Wall Street (69 percent) and health insurance companies (66 percent).
Indeed, the insurance industry spent $160 million lobbying Congress last year, while the pharmaceutical industry spent $279 million, according to the Center for Responsive Politics. Still, public frustration with drug prices has forced lawmakers to scrutinize both industries. Drug makers, insurers and their pharmacy benefit managers — the three major entities that profit from drug sales — have responded by blaming each other for rising drug costs.
A Billionaire Is Spending Big on the Midterms
The corporate behemoths behind the nation’s drug supply chain aren’t the only wealthy actors attempting to influence the drug pricing debate. Consider John Arnold, the billionaire philanthropist preparing to spend millions of dollars to inject drug pricing into the midterm elections.
Arnold, who made millions at Enron before launching his own hedge fund, has waded into various public policy spheres with multimillion-dollar grants provided by the Laura and John Arnold Foundation. The foundation funds researchers, activists and even journalists, including the Kaiser Family Foundation and Patients for Affordable Drugs, the two groups publicizing the poll findings showing that voters want Congress to act on drug prices.
Patients for Affordable Drugs recently launched Patients for Affordable Drugs NOW, a political group that is expected to spend “seven figures” supporting and opposing political candidates in the midterm elections, according to The Hill. Most, if not all, of that money will come from the Action Now Initiative, a nonprofit funded by the Arnolds, according to the political group’s website.
Wakana heads both Patients for Affordable Drugs and its new political campaign arm. He confirmed in an email that the political group funded by Arnold’s Action Now Initiative would be spending millions of dollars during the election. Tax forms posted by the Action Now Initiative shows the group has raised more than $20 million to shape public policy around health care in 2015 and 2016.
Over the past few years, Arnold has given $19 million to the Institute for Clinical and Economic Review (ICER), a controversial nonprofit backed by health insurance companies and their foundations. ICER independently evaluates the cost and effectiveness of drugs and promotes “value pricing,” the idea that drug prices should be based on their ability to treat a medical condition rather than wholesale market economics and convoluted rebating systems, as they typically are now.
Value pricing may sound good on paper, but activists and patients with rarer diseases requiring specialty treatments are sounding alarms. Insurers have used ICER’s evaluations as cover to remove new and expensive drugs from their formularies, effectively blocking affordable access to certain treatments for their members. As one cancer survivor points out, the metrics ICER uses to determine a drug’s “value” reduce the value of a cancer patient’s life to a number, or even a fraction.
As the public demands reforms to the drug pricing system, both the pharmaceutical industry and health insurance industries are increasingly backing value pricing as a potential path to reform. Alex Azar, the former Eli Lilly executive who recently became President Trump’s health secretary, padded his resume for the job with support for value pricing.
Elizabeth Rowley, the founder and director of T1International, a group that advocates for people with Type 1 diabetes, said there is a reason industry insiders support value pricing: It will allow big drug corporations to maintain a huge amount of power over drug prices. Advocates for people with diabetes are challenging drug companies over the skyrocketing price of insulin, a hormone that patients need to survive.
“The bottom line is, outcomes or value pricing will not lower the price of insulin for people with diabetes,” Rowley told Truthout in an email.
Will Congress Act on High Drug Prices?
Arnold’s efforts to force Congress’s hand on drug pricing are bound to have an impact on the midterms as Arnold-funded advocates campaign for or against candidates and shape the public narrative. While Congress has not passed any significant legislation to reform the drug pricing system, some members — Democrats in particular — are responding to public outcry and working to become leaders on the issue.
Leading the pack is Sen. Claire McCaskill, who is running for reelection in her home state of Missouri. Last year, McCaskill worked with Sen. Patty Murray to pass a law designed to speed up approvals of generic drugs that can compete with brand name drugs in order to lower prices. Last month, McCaskill released a report through the Senate Committee on Homeland Security and Governmental Affairs showing that prices for widely used pharmaceuticals are rising 10 times faster than inflation.
Like certain advocacy groups, including Patients for Affordable Drugs, McCaskill has singled out drug manufacturers as the culprits for high drug prices. However, manufacturers and some activists are pointing the finger back at insurers and their pharmacy benefit managers, who claim to negotiate lower prices on behalf of their customers, for their role in pushing up drug prices and leaving patients with high out-of-pocket costs. Insurers and health care managers have already contributed nearly $600,000 to McCaskill’s 2018 campaign war chest.
It’s clear that something must be done to bring down prescription costs, and drug makers, insurers and pharmacy benefit managers are scrambling to protect their profit margins from impending reforms and shape what those reforms will look like.
Meanwhile, grassroots advocates for changing the entire profit-driven system behind drug prices could find themselves drowned out by the voice of one philanthropist with millions to spend on proposals that follow a free-market philosophy.
Expect all of these players to duke it out for the loyalty of candidates running in the midterm elections.
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