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Would a Compromise on the Drug Pricing Bill Be a Victory or Defeat?

President Trump has reached an agreement on the outlines of a prescription drug bill with House Speaker Nancy Pelosi.

President Trump has reached an agreement on the outlines of a prescription drug bill with House Speaker Nancy Pelosi.

When does it make sense to compromise as opposed to continuing to press for a principled position? This is a question that Democrats in Congress may have to deal with if Donald Trump gets over his temper tantrum about congressional investigations.

Trump has apparently reached an agreement on the outlines of a prescription drug bill with House Speaker Nancy Pelosi. It would likely provide a limited amount of price reductions on a limited number of drugs. The question is whether it makes sense for Democrats to go along or to tell Pelosi to go back to the drawing board.

There have been times in the past when compromise on this issue would have made sense, most notably the Medicare prescription drug benefit that President George W. Bush pushed through Congress in 2003. This is an example of a benefit that was structured in the worst possible way.

The bill explicitly prohibited the Department of Health and Human Services from negotiating prices for drugs purchased under the plan. It also required that beneficiaries in the traditional Medicare system (as opposed to Medicare Advantage) buy a separate stand-alone insurance plan from private insurers.

The use of private insurers added billions of dollars in unnecessary expense each year to cover the administrative costs and profits of the insurers. It also added a needless complication, creating a new form of insurance that does not exist in the private sector. (We don’t have stand-alone prescription drug insurance plans.)

The Republican proposal even threw in extra gravy for the drug industry. It required that drugs purchased for people who were in both Medicaid and Medicare would be compensated at the higher Medicare rate, handing billions of extra profits each year to the drug industry.

As bad as this bill was, it was still worth supporting for the simple reason that the Democrats were not likely to get a better bill through Congress and signed by a president any time soon, and it did make drugs more affordable for millions of seniors. As it turned out, the Democrats did not retake Congress until 2006.

They didn’t get the White House until 2008, and when they did, President Obama had many other issues to deal with, like a collapsed housing bubble and the Great Recession it caused. Undoubtedly, there would have been some Medicare drug measures in the health care reform he eventually did pass in 2010, but it would have made the bill an even bigger lift and likely would have meant giving up something elsewhere in the Affordable Care Act (ACA).

In the current situation, the Democrats have a good chance of retaking the White House next year and holding on to the House. The Senate is more questionable, but in a post-Trump era, a small number of Republican senators may be prepared to break ranks to deliver affordable drugs to their constituents. There can be no guarantees on the post-2020 political lineup, but that one seems plausible.

On the other hand, if the Democrats make a deal with Trump and the Republican Senate, that will give the GOP a triumph that they can boast about in the 2020 election. Trump will have delivered on one of his major campaign promises and show that he really is a master dealmaker.

It may be worth giving Trump and the Republicans this political victory. After all, the Democrats will share in it as well. This will be concrete evidence that they are legislating and not just investigating.

But there is an important qualification here. The bill has to offer real benefits to a substantial number of people. In other words, people have to see that they are paying less for prescription drugs as a result of the bill.

In spite of its many inadequacies, people did see benefits with the ACA. We know this because they voted with their feet. There was a large increase in the number of people choosing to work part-time after the bill took effect. This was primarily due to young mothers who wanted to spend more time with their children. They were presumably able to work part-time because the ACA allowed them to get health care insurance outside of employment, either through the Medicaid expansion or through the exchanges.

If the Democrats want us to believe that a compromise prescription drug bill is a real victory, then they have to be able to say that people will notice and that they will feel the bill has provided serious relief on the cost of prescription drugs.

If the Democrats can’t say that their compromise bill produces visible results in the form of lower drug prices, then there is one simple word to describe it: pathetic.

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