Congress has yet to pass major legislation lowering U.S. drug prices. But there are signs within President Trump’s newly passed North American trade deal that the pharmaceutical industry’s grip on lawmakers may be slipping.
The Senate gave the president his long-sought win yesterday just ahead of his impeachment trial, approving in an 89-to-10 vote a sweeping economic pact between the United States, Canada and Mexico that governs more than $1.2 trillion worth of trade between the three countries.
Lawmakers stripped from the final deal several provisions favored by the drug industry that would have boosted efforts by makers of brand-name drugs to quash competition. It was hailed by manufacturers of generic drugs, hospitals and other health providers, who said it sets up a strong and fair foundation for how pharmaceutical products could be treated in future trade agreements with China and the United Kingdom.
The altered U.S.-Mexico-Canada Agreement is “the most balanced trade agreement the U.S. has ever signed,” Jonathan Kimball, vice president of trade for the generic drug group Association for Accessible Medicines, told me.
“I think one of the most important parts of the trade deal is Democrats and Republicans realize the system must change and the bipartisan majority who voted for it have put a marker down that things are changing,” Kimball said.
The Association for Accessible Medicines:
Indeed, an overwhelming majority of senators from both parties supported the agreement, which the House passed last month by a similarly wide margin, my Washington Post colleagues Erica Werner and Rachel Siegel report. It replaces the 25-year-old North American Free Trade Agreement, something Trump repeatedly pledged in 2016 to do.
Today, the Senate passed a #USMCA that has been transformed by Democrats’ leadership. Now, “Grim Reaper” Leader McConnell must allow votes on House-passed bills to raise the minimum wage, lower prescription drug prices and more. #ForThePeople https://t.co/HWyafMq0MT— Nancy Pelosi (@SpeakerPelosi) January 16, 2020
Rep. Mike Thompson (D-Calif.):
Exciting news – the Senate just passed legislation to implement the USMCA Trade Agreement, which I helped negotiate on the Working Group. Next stop is being signed into law to help our workers, protect our environment and keep down the cost of prescription drugs!— Mike Thompson (@RepThompson) January 16, 2020
What’s most significant about the USMCA and prescription drug development is what it didn’t include.
An earlier version would have set the period in which the makers of new brand name drugs are protected from competition at 10 years. That’s two years less than the current 12-year “exclusion period” — but enshrining it in the trade deal would have required Congress to gain permission from Mexico and Canada before altering it in the future.
The original trade deal would also have created additional pathways for makers of branded drugs to extend their exclusivity periods — a practice that’s already common as they seek to maximize earnings off a drug before it has any generic competitors. The companies argue these longer exclusivity periods are necessary to let them reclaim their spending on research and development.
Such practices typically involve biologic drugs, medicines that come from living cells containing proteins and other materials that can treat diseases such as cancer or rheumatoid arthritis. It's these biologics that are the biggest driver of high drug prices.
So makers of branded drugs were predictably excited about version 1.0 of USMCA and disappointed by version 2.0. Stephen Ubl, president of the Pharmaceutical Research and Manufacturers of America, said the stripped-down final version “removes vital protections for innovators.”
“The only winners today are foreign governments who want to steal American intellectual property and free ride on America’s global leadership in biopharmaceutical research and development,” Ubl said in a statement the group issued when the House passed the deal in December.
But the rest of the health-care industry sees the USMCA as a rebuke of an industry that’s already under fire for hiking drug prices while continuing to pocket huge profits.
“Congress and the White House have rightly recognized that at a time when 58 million Americans struggle to afford their prescription drugs, it would be a step in the wrong direction to further enable Big Pharma’s anti-competitive tactics,” said Lauren Aronson, executive director of the Campaign for Sustainable Rx Pricing, a coalition of health groups that includes hospitals, doctors and insurance plans.
From a pure trade standpoint, USMCA isn’t terribly consequential for the U.S. drug industry. Canada and Mexico are not even close to the U.S.'s top trading partners of pharmaceutical products.
Rather, it’s China that produces many of the ingredients U.S. drugmakers use to develop their medicines. Any trade agreement Trump negotiates with China if he wins a second term as president will be more important commercially to the industry. And if that time comes, supporters of the USMCA are hopeful the deal will be used as a starting point.
“We think we now have a template moving forward where both Democrats and Republicans have a trade agreement that supports access to affordable medicines,” Kimball said.
AHH, OOF and OUCH
AHH: Planned Parenthood announced plans for its biggest electoral effort to date. It plans to spend $45 million to support candidates in the 2020 election who support abortion rights, including at the presidential, congressional and state levels, CBS News’s Kate Smith reports.
The group hopes to reach 5 million voters across nine states -- Arizona, Colorado, Florida, Michigan, Minnesota, New Hampshire, North Carolina, Pennsylvania and Wisconsin -- as it anticipates another year of state-level abortion restrictions and national court battles.
“South Carolina is considering its own six-week ban on abortion and lawmakers in Tennessee are pushing to restrict the procedure entirely. A bill in Ohio overhauls the state's penal code to call for some abortion patients to receive the death penalty,” Kate writes. “In March, the Supreme Court will hear its first abortion case since the appointments of Justices Neil Gorsuch and Brett Kavanaugh flipped the Supreme Court conservative.”
The Trump Administration "has managed to undo so much over the last three years," Jenny Lawson, executive director of the group's political action committee, told Kate. "The fact that this summer the Supreme Court might gut Roe v. Wade is an indicator of their intention, and they've never been so bold."
— And influential anti-abortion group Susan B. Anthony List and its super PAC is planning a $52 million effort for the 2020 election cycle. The effort will include canvassing, mail, phone calls and digital ads focusing on races in Arizona, Florida, North Carolina, Iowa, Georgia, Michigan, Pennsylvania, Texas and Wisconsin, the group said in a press release this morning.
Spokeswoman Mallory Quigley praised Trump as being "the most pro-life president in our nation's history" while charging that the Democratic presidential contenders are "declaring war on even the most modest pro-life policies."
“From now until Election Day, our team will go door-to-door visiting traditional Democrat voter groups who may simply be unaware of the Democrats’ support for extreme pro-abortion policies,” Quigley said in a statement.
OOF: A group of 14 state attorneys general is suing the Agriculture Department over a plan to tighten work requirements for beneficiaries of the Supplemental Nutrition Assistance Program, a change that could cut hundreds from food stamp benefits.
The Trump administration announced last month that it had finalized a rule as part of a broader effort to limit access to the food safety net program, our Post colleague Laura Reiley reported then.
The lawsuit filed yesterday “argues that USDA unlawfully limited states' discretion to exempt certain adults from work requirements for an extended period of time based on local employment conditions,” Politico’s Catherine Boudreau reports.
The program’s current work requirements allow states to waive the limit on how often able-bodied adults can receive benefits without a job or other training when unemployment rates are high. The new rule would “make it more difficult, in part by lowering the unemployment rate required to qualify for them. USDA estimates that the change will save about $5.5 billion over five years,” Catherine reports.
“Denying access to vital SNAP benefits would only push hundreds of thousands of already vulnerable Americans into greater economic uncertainty,” said New York Attorney General Letitia James. “In so doing, states will have to grapple with rising health care and homelessness costs that will result from this shortsighted and ill-conceived policy.”
OUCH: New data from the Centers for Disease Control and Prevention finds about 15 percent of adults across all U.S. states and territories are physically inactive, Stat’s Shraddha Chakradhar reports.
The survey, which assessed people’s health activities, chronic conditions and use of preventive health services, asked respondents whether they had participated in any physical activities, such from running, walking, gardening or golf, in the past month.
Puerto Rico had the highest total of physically inactive people, with 47.7 percent, and Colorado had the lowest, with 17.3 percent.
“Overall, states in the Pacific Northwest, Colorado, Utah, and Washington, D.C., had the smallest percentage of physically inactive adults. At least 30% of adults in many Southern states, Puerto Rico, and Guam reported not being physically active,” Shraddha writes. “Starker differences emerge when the data are sorted by race and ethnicity. For instance, among white non-Hispanic adults, fewer than 15% of adults in Colorado, Hawaii, and Washington, D.C., reported physical inactivity. Guam — which had high overall rates of inactivity — falls within the lowest bracket among white adults. In general, white adults were also the least likely of any racial group to be physically inactive.”
HEALTH ON THE HILL
— Leaders of the House Ways and Means Committee have a plan to try to tackle the issue of surprise medical billing that has stalled in Congress, Politico’s Rachel Roubein and Dan Goldberg report.
The proposal from committee Chairman Richard Neal (D-Mass.) and the panel’s ranking Republican, Kevin Brady (Tex.), differs from the bipartisan deal from the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions Committee from last year.
But Neal and Rep. Frank Pallone (D-N.J.), chairman of the House Energy and Commerce Committee, downplay any conflicts in their plans. And Neal suggested the plans could merge.
“By calling for outside mediation when private negotiations hit an impasse, the Ways and Means plan moves closer to an approach preferred by powerful hospital and physician groups nervous about any compromise that could favor health plans,” Rachel and Dan write.
If they want to find a compromise, it will have to happen fast. “[A]ll involved agree the best chance of moving a fix comes in May, when Congress will have to renew funding for community health centers, programs boosting primary care and more. Eliminating surprise billing could provide billions of dollars in projected savings to the government that could help pay for those efforts and boost the prospects for passage in a Congress riven by impeachment and election year politics,” Rachel and Dan add.
“Frank and I are going to try to get together pretty fast with [House Majority Leader] Steny [Hoyer], and we don’t think there are big differences between the Ways and Means bill and the E&C bill,” Neal told Politico.
— A new analysis found that premiums for certain plans on the Affordable Care Act marketplace decreased across 31 states for 2020.
The report from the Urban Institute found an average drop of 3.5 percent for the cost of the lowest-cost silver-tier ACA plans for a 40-year-old nonsmoker.
In 2018, the average premium for the cheapest plan increased by 29.7 percent, while in 2019 there was a decrease of 0.4 percent. The report points to the stabilizing marketplace as a reason for the decrease in 2020.
“The individual market has clearly stabilized since the disastrous premium spikes of 2018,” Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, which funded the study, said in a statement. “But some markets remain uncompetitive, and affordability is a problem across the board for the unsubsidized.”
— And here are a few more good reads:
- The Washington Post Live hosts a conversation with White House Bureau Chief Philip Rucker and National Investigative Reporter Carol Leonnig about their new book "A Very Stable Genius: Donald J. Trump's Testing of America” on Jan. 24.