Presidential candidates from both parties are full of sound and fury about various aspects of the U.S. health care system, but unless we as a nation get serious about big money in politics, all the noise will ultimately amount to nothing.
Every one of the Republican candidates has pledged to repeal and replace the Affordable Care Act. But I’m not sure they realize that the interests of the insurance and pharmaceutical industries, as well as hospitals and physicians, were considered first and foremost as the law was being drafted.
Yes, Obamacare has brought some needed reforms to the insurance marketplace and has enabled millions of previously uninsured Americans to finally get coverage. But health insurers have not only thrived since the law was passed, they are more profitable than ever, and that has made their executives and investors happy—and richer. The stock prices of the five largest for-profit insurers have tripled and in some cases quadrupled since the law was passed.
And now that many more people can afford to see a doctor and pick up their prescriptions and hospitals are not having to provide as much charity care, most health care providers would be just as upset as the insurers if a repeal of the law became a real possibility.
On the Democratic side, Hillary Clinton and Bernie Sanders have both announced plans to fix some of the problems not addressed by the ACA. Both of them said they favored allowing Medicare to negotiate with pharmaceutical companies for lower prices and they both want to make it legal for Americans to re-import drugs from Canada and elsewhere. They also criticized the outsized profits of many drug makers and pledged to force the companies to provide more information about how much they actually spend on research and development.
Clinton also proposed capping out-of-pocket drug spending for some people with chronic conditions at $250 a month. Even though her campaign acknowledged that the cap would apply to only about a million people, the proposal drew sharp rebukes from both the insurance and pharmaceutical industries.
America’s Health Insurance Plans, the industry’s largest PR and lobbying group, said it opposed any plan “that would impose arbitrary caps on insurance coverage.”
AHIP even criticized Clinton’s and Sanders’ plans to enable Medicare to negotiate for lower drug prices, saying that imposing caps and “forc[ing] government negotiation on prescription drug prices will only add to the cost pressures facing individuals and families across the country.”
If you’re wondering why insurers don’t want Medicare to have the ability to negotiate with drug companies, here’s why: it would make their Medicare Advantage plans, which offered prescription drug benefits to seniors long before the traditional Medicare program could, much less attractive. The irony is that private insurers can negotiate with drug companies but the federal government cannot.
And if you’re wondering why that is, here’s why: lobbyists for drug companies and insurers have defeated every bill that has been proposed over the years to allow Medicare to negotiate for drug prices, just as they have been able to defeat every bill—even those with bipartisan support—that would allow Americans to order medications from Canadian pharmacies.
When Congress was considering legislation to add a prescription drug benefit to Medicare in 2003, industry lobbyists insisted that language that would have authorized the government to negotiate with drug companies be stripped out of the bill. Six years later, they won again when they the Obama administration caved in to pressure from the drug companies and made certain that the ACA would not include drug negotiation authority for Medicare. This despite the fact that Obama had said when he was a senator from Illinois that “Drug negotiation is the smart thing to do and the right thing to do.”
In fact, the drug companies always win, which is why Americans pay far more than citizens of any other country for prescription medications. We pay exactly 100 percent more per capita for pharmaceuticals than the average paid by citizens of the 33 other developed countries that comprise the Organization for Economic Cooperation and Development (OECD).
Obama also once supported drug re-importation, as did Sen. John McCain, the Arizona Republican who lost to Obama in the 2008 presidential election. In 2012, two years after the passage of the Affordable Care Act, McCain teamed up with Sen. Sherrod Brown, (D-Ohio) in another attempt to get Congress to pass a drug re-importation bill.
When it became clear that his bill would not pass, McCain took to the floor to denounce the ability of well-financed special interests to control the federal government.
“What you’re about to see is the reason for the cynicism that the American people have about the way we do business in Washington. (The pharmaceutical industry) . . . will exert its influence again at the expense of low-income Americans who will again have to choose between medication and eating.”
Don’t expect that to change anytime soon. As long as interest groups can spend unlimited amounts of money to influence elections and can hire hundreds of lobbyists to do their bidding, millions of Americans will have to decide between health care and eating, while executives and shareholders get richer and richer.
Wendell is a senior analyst at The Center for Public Integrity where this first appeared on 9/28/2015.
Drug money lobbyists or not; the situation has become so critical that nationalization of the drug industry may come to pass. The price gouging drug companies may be smarter to accept negotiation of drug prices than to see their industry nationalized.