Rep. Scott Peters is a harbinger of doom for a bill aimed at lowering drug prices, one of House Speaker Nancy Pelosi’s top priorities.
Mr. Peters, a centrist Democrat from California, told The Washington Times that he is ready to vote against Mrs. Pelosi’s legislation. He fears the bill, which requires Medicare to negotiate lower drug prices with pharmaceutical companies, would bring about government price-fixing and reduce the amount of money drug companies spend on developing new medications.
He warned that the bill “would not be negotiation, but price-fixing. It will result in the defunding of science.”
Mr. Peters also said a provision that would put a ceiling on prices based on how much drug companies charge in other countries could “hurt the American people.”
His reservations echo concerns raised by Republicans.
Mr. Peters stressed that he is speaking only for himself and not fellow Democrats.
But Dan Adcock, the government relations and policy director for the National Committee to Preserve Social Security and Medicare, one of the leading advocates of the proposal, said he is concerned that moderate House Democrats will block the ambitious proposal.
With Democrats holding a slim 219-211 advantage in the House, defections by even a few moderates would threaten the proposal or force significant changes.
This month, Mr. Peters organized a letter to Mrs. Pelosi by 10 moderate House Democrats, who stressed the importance of not weakening the ability of drug companies to develop new medicines.
The other nine Democrats who signed the letter did not respond to inquiries about how they plan to vote on the bill.
Henry Connelly, a spokesman for Mrs. Pelosi, downplayed emerging divisions among Democrats and predicted that the drug-pricing bill will pass the House.
“Polling shows strong action to lower outrageous prescription drug prices and stop Big Pharma from charging Americans three times or more than what they charge for the same medicines overseas is overwhelmingly supported by Democrats, Republicans and independents alike,” he said.
However, the American Action Network, a conservative advocacy group with ties to the pharmaceutical industry, is spending $5 million on television and digital ads that say the proposal is socialist. The group also is delivering the message with phone calls to voters in 43 congressional districts represented by vulnerable Democrats.
“Under Pelosi’s socialist drug takeover plan, Washington controls the prescription drug market. That means fewer breakthrough cures and less innovation, like the COVID vaccine.
With Washington in charge, maybe the lifesaving medication you need still gets made. Or maybe it doesn’t,” one ad says.
The Pharmaceutical Research and Manufacturers of America (PhRMA), which represents the drug companies, gave $4.5 million to the network in 2019, according to the Center for Responsive Politics. This nonpartisan Washington organization tracks spending on lobbying and political campaigns.
Several of the targeted Democrats didn’t respond to inquiries by The Times. Rep. Cindy Axne, Iowa Democrat, declined to comment.
At least one of the targeted Democrats, Rep. Matt Cartwright of Pennsylvania, is unabashed in his support for the bill.
His spokesman Matt Slavoski noted that Mr. Cartwright voted for a similar bill when House Democrats passed it in 2019. The congressman wrote an op-ed at the time disputing the argument that the bill would curtail research.
Mr. Cartwright wrote that the price of insulin in the U.S. nearly doubled from 2012 to 2016.
“One of the largest drivers of escalating brand-name drug prices is year-over-year price increases to existing drugs. We’re paying more for the same old thing, not for groundbreaking innovation,” he wrote.
Mr. Cartwright also argued that many drugs are developed using the fruits of taxpayer-funded basic research at the National Institutes of Health.
“Drug companies use this research to develop treatments, which they then sell back to American consumers at steep markups. So, you pay twice: first through your taxes and then again at the pharmacy counter,” he said in the op-ed.
The current proposal would fundamentally change how the prices of drugs covered by Medicare are determined for 44 million beneficiaries. In creating Medicare Part D, which covers part of the cost of seniors’ prescriptions, Congress did not allow the government to negotiate prices with drug companies.
Under the Democratic proposal, Medicare would be required to negotiate the price of at least 25 brand-name drugs with no generic competitors.
It also would give the government all the leverage in the negotiations.
Drug companies could accept the lowest price for the drugs in Australia, Britain, Canada, France, Germany and Japan, or negotiate with Medicare. But the average prices of the medicines in those six countries would be the most the government would accept, and the government could insist on paying even less.
If the drug companies do not agree to a price, then the government would tax the revenue for the drug in question, beginning at 65% and rising each quarter until it hits 95%.
The proposal also would require drug companies to offer the price they negotiate with the federal health care program to private insurance companies.
Mr. Peters does support some aspects of the bill, including a provision that would require drug manufacturers to pay a rebate back to the federal government if they increase prices faster than inflation. He also supports less-controversial measures with bipartisan support, such as stopping drug companies from using patent laws to keep cheaper generic competitors out of the market.
A 2019 Congressional Budget Office report estimated that the lower prices would save Medicare $456 billion. Democrats envision spending that money elsewhere, including for increased federal research funding and covering the cost of hearing care for seniors.
The report, though, estimated that eight fewer drugs would be introduced in the U.S. over the next decade, about 3% less than the 300 drugs approved by the Food and Drug Administration, on average, every decade.
In their May 5 letter, the 10 centrist Democrats stopped short of opposing the bill, which is a high priority of their party’s left wing. Still, the centrists urged fellow Democrats to find a proposal that could win bipartisan support and stressed the importance of preserving American research.
“As we have just seen with the lifesaving, record-breaking development of COVID19 vaccines and therapies, America benefits from the most innovative and capable researchers in the world, and from public-private partnership that encourages world-leading biomedical research and development,” they wrote.