Want the news summarized?
Subscribe to The Morning Report.
For nine years, it has never been clear what the point of U.S. Rep. Scott Peters is. He’s a thoughtful man who is well liked by people who work with him. He seems most animated about climate change and the pursuit of bipartisan incremental solutions to the biggest problems we face.
But what is the point of Congressman Peters? What kind of world does Scott Peters want? The bipartisan instinct, as warm as it makes us feel, has come to seem naïve. He doesn’t seem likely to ascend to a leadership position in Congress and it’s not clear what he would try to do if he did.
This week, though, we may be seeing the point of Congressman Scott Peters. He has found himself with an enormous choice to make and massive influence over one of the most consequential legislative dramas of the last 70 years.
He may set the standard for how Medicare negotiates drug prices with giant pharmaceutical companies for the next several decades. Or he may fumble it all and torpedo his party’s dreams of the biggest overhaul of the social safety net since Franklin Roosevelt’s New Deal. Or he may succumb to the pressure to go along with them and leave himself just a little more vulnerable as he gears up for his first competitive re-election campaign in seven years.
To understand the stakes, you need to know that for the last 18 years, Democrats have been pining for something that, if you look at it a certain way, only Peters and a couple other Democrats now stand in the way of.
In 2003 President George W. Bush and Republicans and Democrats in Congress passed a massive addition to Medicare benefits – in short, the public health insurance system for older Americans would finally cover most prescription drugs they need. But the pharmaceutical industry was able to insert a rule that the secretary of health and human services would not be able to negotiate the prices Medicare paid for those drugs.
That role, instead, would go to the prescription drug plans – the many firms that stand as middlemen between patients, drug companies and the government that pays for them to work together. The law from 2003 prohibited the federal government from interfering in the deals drug companies made with prescription drug plans.
“They didn’t want the government to use its enormous leverage to bring drug prices down,” said Max Richtman, the president and CEO of the National Committee to Preserve Social Security and Medicare. Richtman’s group is one of many putting intense pressure on Peters to come along with their long-desired change.
Democrats have seethed ever since. Politics is about communication and they’ve successfully communicated that what this means is that Medicare — the United States government — is prohibited from negotiating with drug companies. Big Pharma decides how much their drugs will cost and the government must pay it.
Left or right, put like that, it does violence to a sense of justice. How could perhaps the most powerful entity in the world, the U.S. government, not have a say in how much money it will pay for a product or service? How could that not enormously tip the scales in the drug companies’ favor? Since 2007, Democrats have lobbied for laws that would immediately change it and allow the secretary of health and human services the chance to negotiate those prices.
But very soon they realized that even with the power to negotiate the government would need something more: a deal drug companies could not refuse, or, as the Congressional Budget Office put it, “leverage.”
In today’s bill – the one Peters is blocking — it comes in the form of an up to 95 percent tax the government would impose on the drug if its makers refused to charge the United States less than 120 percent of what an index of other countries pay for the medicine.
Peters voted twice for bills like this. But he says he knew they would not pass the senate and that he told Democratic leadership he did not like them and would not do it again. He said he wanted to have a bigger conversation about them and he didn’t get it.
“I got the conversation when I voted no,” he said.
He certainly did. His vote is now a key obstacle to the Democrats passing a multi-trillion-dollar climate change, child-care, public spending plan – part of the plan to pay for it all is to lower what the government pays for prescription drugs.
Watching Major League Baseball playoffs the other night, I caught an advertisement hammering Peters for potentially not standing up to a “socialist” drug price setting plan his fellow Democrats were pushing through Congress. But then those ads stopped and the maker pulled them down.
A few days later, as a constituent of Peters, I got a glossy mailer from him, paid for by taxpayers, about his own plan to “reduce prescription drug prices and promote research on life-saving medications.” And outside his offices, constituents have been protesting.
He got his conversation. He offered alternative legislation to allow negotiations on just some drugs and services. He freely admits the pharmaceutical and biotech companies in his district – 1,000 companies and 68,000 jobs – are on his mind. He’d be fine if Democrats would just drop the leverage – the threat to impose a tax on a drug if the drug maker won’t negotiate to within 120 percent of what other countries pay.
That, Peters said, isn’t negotiations but price fixing. Or worse, according to the industry, it’s a deal they can’t refuse.
“As proposed, the government would be able to keep a company from walking away from an unacceptably low price. … Overlooked in that bargain is that investors and companies will stop investing in new programs, and we’ll give up the medicines that haven’t’ been invented yet,” reads a letter from hundreds of investors and companies who work on cures – many of them from San Diego.
Lisa Swirsky, a policy advisor to the National Committee to Preserve Social Security and Medicare, said that’s a bogus argument.
“The bill leaves the latitude for drug companies to charge Medicare a lot more – 20 percent more – than they charge other countries,” Swirsky said. “Arguably, the United States is the largest buyer and largest market and thus, we should be paying less. But even with this law, we’re giving them latitude to charge us significantly more.”
Peters might or might not have been working toward this very moment for the last decade. This may be his defining legacy. This may be the point of Rep. Scott Peters, but it will test his abilities unlike any time in local politics.
And it’s an election year. Richard Bailey, the mayor of Coronado, has been raising a lot of money across the district as he tries to present himself as new hope of local Republicans. Nationwide, the GOP is hoping to take the House, whether they back Bailey as much as they can is unclear.
I asked Bailey for comment on what he would do in this negotiation. He declined to respond.
“The election is in a year. If I can come home having lowered the cost of drugs for seniors while saving innovation in San Diego, I would feel pretty good about my prospects,” Peters said.
That’s probably true but if he doesn’t make his mark here, it will again be unclear what the point of Rep. Scott Peters is.