Sen. Kyrsten Sinema (D-Ariz.) says she wants to be just like John McCain, the former Republican senator who was also from Arizona and famous for his independent streak.
That makes it a little hard to understand her objections to a key Democratic health care proposal that the pharmaceutical industry hates and that McCain, once upon a time, said he supported.
The initiative is part of the Build Back Better legislation that President Joe Biden and Democrats are trying to pass. It would give the federal government power to negotiate some prescription drug prices directly with manufacturers, penalizing them if they refuse to accept the negotiated price.
It would also limit year-to-year increases for particular medications, in order to prevent pharmaceutical companies from price-gouging on drugs that have been on the market for a while.
The proposal has the support of nearly every Democrat in Congress, just like the broader Build Back Better legislation does. But the party’s bare majorities mean leaders can afford to lose only three House members and literally no senators ― and, as Politico first reported last month, Sinema has said privately she can’t support what Biden and allies want to do on drugs.
The precise contours of her position on prescription drug policy aren’t clear, because she hasn’t said publicly what she wants. Spokesperson John LaBombard has warned that many characterizations of her posture are inaccurate, and that she is still “carefully reviewing various proposals around this issue.”
But multiple sources privy to discussions have told HuffPost that Sinema is pushing for a less ambitious initiative that would leave the federal government with dramatically less power to reduce prices.
McCain Supported Medicare Drug Negotiation
The pharmaceutical initiative is an especially pivotal part of Build Back Better, because it would reduce what Medicare spends on drugs for seniors, freeing up dollars that could go to other initiatives. More important, it would help millions of Americans who struggle to pay for their medications today.
Providing that kind of relief has been a longtime cause for Democratic Party leaders, going back to 2003, when President George W. Bush and GOP allies first added a drug benefit to the Medicare program and included a provision explicitly prohibiting the government from regulating pieces.
But not every Republican was on board with that decision. Among the GOP critics was McCain.
“Taxpayers should be able to expect Medicare, as a large purchaser of prescription drugs, to be able to derive some discount from its new market share,” McCain said back then. “Instead, taxpayers will provide an estimated $13 billion a year in increased profits to the pharmaceutical industry.”
McCain was even more explicit ― and dismayed ― at a hearing he chaired.
“Why in the world, if we’re interested in lower prices for prescription drugs, would we put a prohibition in that Medicare can’t use its market share to negotiate better prices for drug companies?” McCain said. “I mean, it makes no sense. ... Why in the world would we do such a thing if we’re interested in lower prices?”
At that same hearing, McCain even said the prohibition validated attacks on the drug industry from Sen. Bernie Sanders (I-Vt.), who at the time was serving in the House and arguing, as he does today, for government negotiation of drug prices.
Years later, when McCain’s 2008 presidential campaign campaign ran an ad touting his record of fighting the pharmaceutical industry, Politifact rated it “mostly true.” As proof, they cited his previous efforts to allow reimportation of drugs from Canada ― and the joy he seemed to take attacking the industry rhetorically.
During a GOP primary debate, when a rival warned against turning drug companies into “the big bad guys,” McCain piped up to say, “but they are.”
McCain’s positions weren’t always consistent and, in many respects, he was a doctrinaire conservative who wanted to let businesses operate free of government interference. But he bucked his party and free market orthodoxy with predictable regularity, especially when he believed he was fighting special interests to promote the well-being of everyday Americans.
That was, for example, a big reason he became such a passionate supporter of campaign finance reform. He saw it as a way to limit the ability of wealthy corporations to get policy changes they wanted or to block ones they didn’t.
Similar logic explained why McCain supported a “patient bill of rights” that sought to restrict denials of care from health insurance companies.
The Policy Fight Is A Fight With The Drug Industry
Today, there may be no single issue on which that dynamic is more obvious than prescription drugs.
In every other economically advanced country, governments have some kind of authority over drug prices, which is why their citizens pay so much less for name-brand drugs than Americans do. Giving the U.S. government similar power is a wildly popular idea here, with support that crosses party lines, as polls have shown repeatedly.
Like all policy ideas, the concept entails real trade-offs and raises real questions about which serious, thoughtful people can disagree. Conservatives in particular worry that reducing drug company revenue would reduce the ability of those companies to attract investment. This would mean less innovation and fewer breakthroughs, these conservatives say.
But there are many reasons to question that prediction, especially when it comes to the particular proposal Democratic leaders have in mind.
Democrats have repeatedly said they intend to plow some of the savings back into the National Institutes of Health, whose research funding generates the scientific advances that lead to new drugs. They have also said they would take special care to support smaller biopharma and biotech firms that really drive development, perhaps by making available a special pool of taxpayer-provided venture capital.
Beyond that, Democratic leaders have already scaled back their initial proposal, a bill that House Democrats passed (and Republicans then in charge of the Senate ignored) back in 2019. In particular, they have already signaled their willingness to limit the number of drugs subject to negotiation and to alter the formulas for setting prices, so that they are more favorable to the drug companies.
Democrats did so in part to win over a small handful of Democratic holdouts, all of whom have close ties to the drug industry.
On the House side, the most visible has been Scott Peters, who represents a San Diego, California, district with a large number of life sciences companies. So far this year, Peters has been the top House recipient of drug industry donations, according to a new Reuters analysis of data from the watchdog group OpenSecrets.
On the Senate side, the group of objecting Democratic senators has included Robert Menendez of New Jersey, where some of the world’s largest pharmaceutical companies have their headquarters. He’s always pulled in heavy donations.
Sinema is also among the lawmakers who has been getting the most industry support, especially in the last year. Her list of recent individual donors includes top corporate officials from Bristol Myers Squibb, Eli Lilly, Genentech, Gilead and Merck, Politico reported last month.
What role those donations have played in her thinking is impossible to say. Sometimes industry contributions simply flow to lawmakers who have sympathetic positions for substantive reasons. Sinema has raised the innovation argument in private conversations, according to some sources, and LaBombard told HuffPost that “Senator Sinema makes every decision based on one criteria: what’s best for Arizona.”
On the other hand, Sinema during her 2018 Senate campaign ran an ad touting her commitment to lowering prescription drug prices — which, in Democratic Party circles, usually means supporting aggressive negotiation of prices.
Whatever their effect on Sinema, the donations to her and other lawmakers represent just part of the industry’s effort, which also includes millions spent on paid lobbyists and advertising. And in the past, those efforts were enough to snuff out even modest efforts at regulating drug prices.
This time Democrats are talking about something much more ambitious ― and, amazingly, they’re on the verge of doing it. But it would require defying what many people consider the most powerful lobby in Washington. It’s the kind of fight McCain relished having and one Democrats need Sinema to join.