Biden’s Push to Drive Down Drug Prices

By Yuval Rosenberg

Biden Signs Sweeping Executive Order to Promote Competition,
Lower Prices

President Joe Biden on Friday signed a sweeping executive order
that aims to foster competition and limit or reverse corporate
consolidation, steps that the president says will lower prices,
increase wages and build a healthier economy for consumers,
workers, farmers, and small businesses.

"What we’ve seen over the past few decades is less
competition and more concentration that holds our economy back. We
see it in big agriculture and big tech and big pharma and the list
goes on," Biden said before signing the executive order at the
White House. He added: "Let me be very clear: Capitalism without
competition isn't capitalism. It's exploitation."

Biden’s executive order encompasses 72 initiatives across more
than a dozen federal agencies, according to the White House, with
potentially major implications for key sectors of the economy,
ranging from
technology to
financial services to
agriculture.

We’ll focus here on health care, an area where the White House
says a lack of competition increases prices and reduces access to
quality care. "Just a handful of companies control the market
for many vital medicines, giving them leverage over everyone else
to charge whatever they want," Biden said. "As a result, Americans
pay two and a half times more for prescription drugs than in any
other leading country and nearly one in four Americans struggles to
afford their medication.

Biden’s order:

* Directs the Food and Drug Administration to work with states
on importing drugs from Canada;

* Directs the Department of Health and Human Services to issue a
plan to combat high drug prices and price gouging within 45
days;

* Directs HHS to boost support for generic and biosimilar
drugs;

* Pushes the Federal Trade Commission to ban so-called "pay for
delay" agreements, in which the makers of brand-name drugs pay
generic manufacturers to stay out of the market;

* And calls for new rules within 120 days allowing hearing aids
to be sold over the counter.

The executive order also takes aim at hospital and insurance
industry consolidation, trends that the White House says have left
patients, especially those is rural areas, with fewer choices and
higher prices. "Thanks to unchecked mergers, the ten largest
healthcare systems now control a
quarter of the market," the White House said in a
document detailing the executive orders. "Research shows that
hospitals in consolidated markets charge
far higher prices than hospitals in markets with
several competitors."

Biden’s order encourages the Justice Department and FTC to
revise their guidelines to ensure patients are not harmed by
hospital mergers and directs HHS to address hospital billing and
"support existing hospital price transparency rules." It also
directs HHS to standardize plan options on the Obamacare exchanges
to make it easier for people to comparison shop.

Business groups say Biden is off base: Business
groups criticized Biden’s order — and the premise behind it.
"Today’s executive order is built on the flawed belief that our
economy is over-concentrated, stagnant and fails to generate
private investment needed to spur innovation,"
said Neil Bradley, executive vice president of the
U.S. Chamber of Commerce. "Such broadsided claims are out of touch
with reality, as our economy has proven to be resilient and remains
the envy of the world." Hospital and drug industry trade groups
also pushed back, warning that Biden’s order could slow critical
care and claiming that the U.S. already has "the world’s most
competitive market for prescription medicines."

The reality ahead: These presidential orders have a long
way to go before they become federal rules and regulations. The
process could take months, and there are likely to be additional
hurdles ahead. "The eventual rules and regulations that
follow from the White House’s direction are likely to set up heated
battles with top U.S. companies that could take years to resolve,"
The Wall Street Journal
notes.

The Trump administration, for example, issued rules for
states to apply to import drugs, but no imports have begun.
"Several states, including Florida, have expressed interest in
importing drugs as a way to lower costs," CNN
notes. "But Canada has opposed the idea, and
experts question whether the country has enough of a supply to make
a significant dent in US drug prices. Manufacturers have also filed
a lawsuit to stop the effort."

The bottom line: Biden’s order is the most ambitious
effort in decades to counter monopolies and the concentration of
market power, a key theme that has emerged among Democrats in
recent years. "The move marks a sea change from four decades of a
hands-off-big-business approach ushered in by Ronald Reagan,"
Axios’s Margaret Harding McGill
notes.

Biden himself made that shift explicit. "We are now 40
years into the experiment of letting giant corporations accumulate
more and more power," he
said. "And what have we gotten from it? Less
growth, weakened investment, fewer small businesses. … I believe
the experiment failed."

FDA Chief Calls for Watchdog Review of Alzheimer's Drug
Approval

The acting commissioner of the Food and Drug Administration on
Friday asked an independent watchdog to review the process that led
to the controversial approval of drugmaker Biogen’s new Alzheimer’s
treatment, Aduhelm.

In a letter to the Office of Inspector General at the Department
of Health and Human Services, the FDA’s Dr. Janet Woodcock asked
for "an independent review and assessment of interactions between
representatives of Biogen and the FDA" during the approval
process.

The request follows a report from
STAT News late last month that detailed an unusual
back-channel collaboration between Biogen and the FDA during the
approval process, including an "off-the-books" meeting with the
agency’s top regulator of Alzheimer’s drugs. "FDA played an
extraordinarily proactive role, even drafting a road map on how the
company could win approval," the STAT report said. "Several experts
said that relationship was not typical and raised serious
concerns."

In her letter Friday, Woodcock wrote that she has "tremendous
confidence" in the integrity of the FDA officials involved in the
approval process "and their commitment to unbiased and
science-based decision-making." But she added that, given the
concerns raised about the contacts between the FDA and Biogen
during the review process, an independent review was necessary. "We
believe an independent assessment is the best manner in which to
determine whether any interactions that occurred between the
manufacturer and the agency’s review staff were inconsistent with
FDA’s policies and procedures," Woodcock said on
Twitter.

Progressives Demand Climate Measures Be
Included in Infrastructure Bill

A group of 11 House progressives is pressing Democratic leaders
to ramp up investments to address climate change as part of a
budget reconciliation package.

In a letter to House Speaker Nancy Pelosi and the rest of House
leadership Thursday, Rep. Cori Bush (D-MO) and 10 colleagues
criticized President Joe Biden’s American Jobs Plan and the
infrastructure deal negotiated by the White House and a bipartisan
group of senators.

"As the urgency to invest in public climate infrastructure and
jobs intensifies each day, we urge you to work with us to deliver
robust and lasting investments at a scale that directly addresses
the climate crisis," the letter says. "We are very concerned that
the American Jobs Plan (AJP), and more so the bipartisan compromise
as it presently stands, will not reduce the greenhouse gas
emissions that are driving the climate crisis to the extent that
science and justice require."

The letter, written in collaboration with climate groups and
first obtained by
CBS News, also complains that, since Biden’s
budget request was released at the end of May, "the conversation
has become a discouraging, tepid dance between the already
compromised AJP and plans from Republicans and bipartisan
coalitions that leave climate out entirely."

Among the other House Democrats signing the letter were Reps.
Pramila Jayapal of Washington, who chairs the Congressional
Progressive Caucus, as well as Alexandria Ocasio-Cortez of New
York, Ayanna Pressley of Massachusetts, Rashida Tlaib of Michigan
and Ilhan Omar of Minnesota.

The group calls for a Green New Deal, with $1 trillion in annual
spending for the next decade, including $1 trillion to "build
public renewables with union labor," $600 billion to expand public
transit and electrify transportation, $600 billion to upgrade
public housing and schools, and "$250 billion in climate and
environmental justice funding for local governments."

Why it matters: The letter from progressives does not
threaten to oppose a budget reconciliation that falls short of
their demands, but it reinforces how difficult a task Democrats —
with a narrow majority in the House and an evenly divided Senate —
face in trying to craft a package that can get through both
chambers.

Quote of the Day

"If you add the two plans together, it would be the biggest
bill in the history of the country. There's no way it’s going to be
easy."

– House Budget Committee Chair John Yarmuth (D-KY) in a

Politico article on the challenges and choices
facing Democrats as they look to enact twin infrastructure bills
that, combined, could be the largest spending bill in
history.

Chart of the Day: The Growing Red-Blue
Vaccination Divide

The stark partisan divide on Covid-19 vaccinations has resulted
in a growing gap in vaccination rates between counties that voted
for Joe Biden in 2020 and those that supported Donald Trump.

A new
analysis by the Kaiser Family Foundation finds
that the difference between average vaccination rates in Biden
counties and Trump counties has widened, rising from 2.2 percentage
points in late April to 6.5 points by May 11 to nearly 12 points by
July 6 (see the
Axios chart below). The average vaccination rate
in Trump counties as of earlier this week stood at 35%, compared to
46.7% in Biden counties.

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