Democrats Face Tough Messaging War on Prescription Drug Bill

Democrats vent their fury as Joe Manchin shelves action on climate changeSource: Bloomberg, by Alex Ruoff and Zach C. Cohen

Democrats want to go into their August recess telling their constituents they’re lowering what they pay for medicines — but many of their promised changes won’t be felt for years, and only by a fraction of the nation.

Drug-pricing legislation is expected to get a vote in the Senate as soon as this week as part of a larger domestic policy package. The pharmaceutical industry, conservative groups, and Republican lawmakers are already bashing the measure in television ads and in town halls, painting it as ineffective and harmful to drug innovation.

This messaging war could be challenging for Democrats because some of the major benefits of their drug-pricing bill won’t go into effect until 2025, too late for voters in elections this November. Opponents of the drug bill say they’ll try to capitalize on that.

“The administration knows none of this is going to help benefit people anywhere around the country, nobody this year,” said John Barrasso(R-Wyo.), a physician who’s chairman of Senate Republicans’ messaging operation.

The party of the president tends to lose seats during midterm elections, and this November is shaping up to repeat that precedent. President Joe Biden has a low approval rating and Americans report increasing dissatisfaction with the direction of the country and the economy.

The legislation is the culmination of more than a decade of work by Democrats to make good on their promise to reduce prescription drug prices in the US by allowing the government to negotiate with drugmakers.

Democratic leaders say they’ve got the backing of influential groups such as the AARP, who can help spread their message about coming benefits — namely a $2,000 out-of-pocket cap on what seniors pay each year for medicines.

“Of course it will take time to phase out, and of course the opposition will try to cause problems in the meantime, that’s just the nature of it,” said Sen. Debbie Stabenow (D-Mich.), head of the Democratic Policy and Communications Committee. “We just have to tell the story, and work with AARP and everyone else to tell the story of what we’ve done, and explain that relief is coming and it will come as fast as possible.”

Democrats also face concerns within their own party that the drug-pricing bill doesn’t go far enough because it would limit drug negotiations to only a set number of medicines that’ve been on the market for years. Sen. Bernie Sanders (I-Vt.), who caucuses with Democrats, said limiting negotiations is a mistake, and Americans want a more forceful effort to lower drug prices.

“This is a weak bill, which goes nowhere near as far as I think the American people want us to go,” Sanders said.

Attack Ads

Democrats seen as swing votes or who have difficult reelection bids already face attack ads around their drug-pricing bill. Outside groups have spent more than $8.2 million on broadcast ads lambasting the drug-pricing provision since it was unveiled in July, data from media tracker AdImpact show.

The dark-money group American Prosperity Alliance has spent $5.7 million and counting on ads in West Virginia, Georgia, Nevada, and Washington, D.C. The spots falsely claim that this legislation would strip Medicare of $300 billion, misinterpreting projections that the legislation would lower Medicare spending by $288 billion over 10 years.

Sen. Catherine Cortez Masto (D-Nev.), who is up for reelection this November, said last week “hundreds” of Nevadans called her office worried about the policy. “In Reno this past weekend, Nevadans came up to me because they were concerned about these false accusations,” Cortez Masto said on the Senate floor.

The Partnership to Fight Chronic Disease, a political tax-exempt group, has spent more than $1.1 million on ads in West VirginiaGeorgiaNevada, and Washington, D.C., urging key senators not to “mess with” Medicare. And PhRMA, the trade association for pharmaceutical companies, is spending more than $1 million across the country warning “government price-setting could mean fewer medicines in the coming years.”

Supporters of the proposal are outgunned, spending millions of dollars less in the same timeframe on broadcast advertising to celebrate the provisions. Some of this funding comes out of the pockets of Democrats who are on the ballot in November.

AARP is spending $436,000 on ads in Washington, D.C., and West Virginia applauding the plan for “putting money back” in voters’ pockets. Majority Forward, a political nonprofit with ties to Democratic Senate leadership, spent $310,000 thanking Sen. Maggie Hassan (D-N.H.) for her support for the domestic policy measure.

Sens. Chris Van Hollen (D-Md.) and Richard Blumenthal(D-Conn.), who are up for reelection, have both spent thousands of dollars running ads touting their work to cut drug costs.

Pre-Recess Messaging

Democrats will likely keep up that drumbeat over the August recess. House Speaker Nancy Pelosi(D-Calif.) wrote to colleagues last week, encouraging members of her caucus to highlight work to “lower costs,” and the Democratic Congressional Campaign Committee in a pre-recess memo warned a Republican majority would “protect Big Pharma profits over people’s lives.”

House Republican leaders last week distributed communications kits—pamphlets meant to give lawmakers talking points while at home in their districts—that decry a a “Democrat Socialist drug takeover could lead to 135 fewer drugs and cures.”

Rep. Brad Wenstrup (R-Ohio), a physician, said Democrats’ bill would “limit production” and would be a “crushing blow to research and development in the pharmaceutical industry.”

“To me, one lost cure is too many,” Wenstrup said. “And one of the worst parts about this bill: if you’re someone, like most Americans, that pays into Medicare your whole life, this bill is robbing Medicare to go ahead and pay for insurance premiums.”

Both sides of this messaging fight are a bit divorced from the reality of the drug-pricing bill, said Spencer Perlman, director of health-care research for the consultancy Veda Partners.

The Senate drug-pricing bill is the “second-best possible outcome” for the pharmaceutical industry behind no congressional action, Perlman said. It’s weaker than what Democrats have proposed in the past and likely means Congress won’t return to drug pricing for years to come, he said. Meanwhile, drug spending will continue to grow over the next decade, and Democrats’ bill is expected to slow that growth rate by about 15% for Medicare and 12% for the commercial market, Perlman wrote in a recent analysis.

Significant Changes

Democrats are trying to advance one of the most significant changes to Medicare’s drug benefit since it was started in 2006. Some of them will be more apparent than others, researchers who study the program say.

In addition to the out-of-pocket cap, the bill would allow seniors in Medicare to spread out their drug costs over the year, and in 2023 Medicare beneficiaries would have no cost-sharing for adult vaccines, said Tricia Neuman, who heads the Kaiser Family Foundation’s research on Medicare.

In 2024, the bill would also eliminate the 5% coinsurance beneficiaries pay when they hit what’s known as a catastrophic threshold, which was more than $7,000 in out-of-pocket drug spending in 2022, she said. This will help people who take brand-name drugs costing thousands of dollars afford their pricey medicines, she said.

More than 1.3 million Medicare beneficiaries hit the catastrophic threshold for drug spending, and more than 1.4 million beneficiaries spent more than $2,000 on medicines in 2020, Neuman said. But that’s just a fraction of about 48 million enrollees in Medicare’s drug benefit.

“It’s a terrible program for people who need expensive, life-saving drugs,” said Stacie Dusetzina, an associate professor in the Department of Health Policy at Vanderbilt, with some seniors not filling their prescription for crucial medicines because of the cost. Dusetzina was part of an April study that found almost a third of people on Medicare weren’t filling anti-cancer drugs.

Dusetzina, who studies Medicare and drug policy, said the drug bill is a big step forward for Medicare.

“Even if they don’t fully get the public to understand the nature of these changes and why they’re so important, it’s still important to do them because the program is broken and needs to be fixed,” she said.

Traditional Prescription Drug Spending Drops

In 2012, U.S. spending on traditional prescription drugs fell for the first time in more than 20 years, according to data by Express Scripts. Traditional prescription drug spending fell 1.5% in 2012 among the country’s commercially insured population. However, this decline was offset by an 18.4% increase in spending on specialty medications to treat more complex diseases, such as rheumatoid arthritis, cancer, and hepatitis C.

Glen Stettin, MD of Express Scripts said that the drop in traditional drug spending is due to the success of utilization management programs and a growing interest in generic medications, home delivery pharmacies, and more focused retail pharmacy networks. Stettin added, “Effective management solutions and increased drug competition are necessary…to rein in specialty drug costs…and increased drug competition, in the form of biosimilars, is necessary to offer more affordable medication.” Last year’s patent cliff ushered in lower-cost generic alternatives for many blockbuster medications and utilization increased for eight of the top 10 traditional therapy classes, while unit costs decreased in seven.

For the second consecutive year, the country spent more on prescription drugs for diabetes than for any other therapy class. Diabetes drug spending increased 11% in 2012, driven, in part, by unit cost increases for popular insulins. Spending on medications to treat attention disorders increased 14.2% in 2012. Utilization increased 8.8%, due largely to an increased number of adult patients. Unit costs increased 5.4% as a result of a 2012 shortage of active ingredients contained in many of the medications in this class.

While affecting fewer than 2% of the general population, specialty conditions in 2012 accounted for 24.5% of pharmacy benefit drug spending  — the highest percentage on record. Specialty medications often require specialized handling, frequent dosing adjustments, and intensive clinical monitoring and patient assistance. The costliest specialty category was for inflammatory conditions such as rheumatoid arthritis; drug spending increased 23%. This increase was driven by a 9% increase in utilization and a 14% increase in unit costs.

There was a 33.7% increase in hepatitis C spending, which is a bigger increase than any other major traditional or specialty therapy class. The increase is due almost entirely to two new drugs being introduced in May 2011. Express Scripts expects total spending on hepatitis C medications to increase 32.3% in 2013 and another 56.3% in 2014.

For cancer medications, utilization increased 3.4% and costs increased 22.3%. Driving much of the cost increases are new drugs that treat unique genetic profiles — a trend that increased in recent years.

In 2012, the Food and Drug Administration approved 22 new specialty drugs, many of which will cost more than $10,000 per month of treatment.

Doctors who are more likely to prescribe generic medications to Medicare patients are younger, see a large number of Medicare patients, and practice in Midwestern states such as Ohio, Illinois, and Michigan.

As more Americans seek treatment for drug and alcohol abuse, chemical dependence is now among the top 10 traditional therapy classes when it comes to Medicaid drug spending. At 24.3% in 2012, chemical dependence drugs account for the largest percentage increase in Medicaid drug spending.

Utilization of cancer medications increased 11.8% for Medicare patients in 2012, contributing to a 32.8% spending increase for this population. Medicare patients increased utilization of hepatitis C medications by 63.5% in 2012. Infection rates for the virus are more prevalent among patients born 1945 to 1965.

Medicaid spends more on asthma medication than on any other single condition. Total asthma spending increased 6.2%, driven largely by increased utilization.

Prices for the most highly utilized brand-name medications increased 12.5% in 2012, far outpacing the general inflation rate of 1.7%. During the same period, generic medication prices declined 24%. This 36.5 percentage point net inflationary effect is the largest single-year widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008. The full report is available atwww.DrugTrendReport.com.

Last Updated 08/10/2022

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