NC Rep. Don Davis is wrong — Medicare must negotiate pharmaceutical prices for seniors.

“We must support the development of critical, life-sustaining medical treatments and cures.” - Rep. Don Davis (D)

The above vague statement was Davis’ lame excuse for supporting the legislative attempt by GOP Rep. Greg Murphy to roll back the very limited authority given to Medicare to do price negotiation under the 2021 Inflation Reduction Act, or IRA. Murphy disingenuously states his rationale in proposing the bill is to reverse the “IRA’s price-fixing scheme.”

The truth is the exact opposite. Our citizens pay much more for drugs than any other nation due to the unique American racket known as the US pharmaceutical business. Per Rand, in 2022: “U.S. gross prices for brand-name originator drugs were 422 percent of prices in comparison countries.”

Under President George W. Bush, circa 2003, Republicans put anti-competitive price negotiation restrictions into the original act, creating Medicare Part D. Biden’s IRA does the exact opposite, eventually providing for free competition via negotiation of drug prices by Medicare.

So, why would Democrat Davis agree to co-sponsor Murphy’s anti-consumer legislation, opposing better drug prices for North Carolina’s seniors? 

Drug companies contributed to Davis

The answer is clear based on the facts: Drug companies are Davis’s third largest industry regarding campaign contributions and a major force in his district, close to the research triangle. To the detriment of our seniors, the pharmaceutical industry is getting their $35,000 worth from Rep. Davis. No wonder he has decided to mislead his constituents, choosing to let them pay more for drugs. 

The fact is that, due to pharmaceutical industry lobbying, the IRA does not go far enough. The IRA only gives DHHS approval to negotiate for 10 drugs beginning in 2026, expanding to more drugs (but nowhere near the majority) over many years. It’s a very limited “nose under the tent” approach. But even that is too much for Davis, given his allegiance to the Big Pharma lobby. 

GOP leaders, including the GOP Doctors caucus (Murphy is in it), have hypocritically come out against free enterprise in drug purchasing. Why are all these supposedly free-market politicians against Medicare negotiating drug prices, hurting America’s seniors? Because these GOP leaders are in the pocket of Big Pharma and do not want to see prices go down through negotiations. 

Democrats are not heroes, either

On the other hand, although Rep. Davis is the only Democrat supporting the Murphy bill, the Democrats are not heroes. If they could have gotten all of their Senators on board (note- all GOP Senators voted no), the IRA would have covered all Medicare drugs rather than just a handful; and it would have taken effect immediately rather than waiting several years.

As it is, Americans will still be paying more than any other developed nation for pharmaceuticals, due to solely to Big Pharma’s money controlling our politics. 

With nearly 1,600 lobbyists, the healthcare/pharma industry has one of the strongest lobbying groups in DC. And 57% of them are former government officials, including politicians. In the 2020 presidential election cycle, both parties were bought off, to the tune of $89 million. And the trend continues this year as the election nears.

Big Pharma responds only to power

I spent 20 years as a senior level executive in massive group purchasing corporations which negotiated billions of dollars in drug purchases annually. One of the nation’s largest, which I helped create as VP of Development, is located in Charlotte: Premier Inc. If Congress were really serious about lowering pricing, it could have started immediately by simply stating that Medicare would get preferential pricing (known in the industry as “most favored nations”), using groups like Premier which have already done this for many decades.

I know first-hand that you cannot believe anything that a pharmaceutical firm tells you when it comes to price. They only respond to power via large scale negotiations.

The IRA will eventually bring down some drug prices for seniors via Medicare negotiations. Now, it's up to Congress to take the initiative and expand the law to immediately cover Medicare negotiations for all drugs rather than just a few dozen. The exact opposite of what NC Representatives Davis and Murphy propose.

Jack Bernard is the former director of Health Planning for Georgia and a retired high-level executive with a healthcare corporation. He was one of the founders of Premier, Inc. in Charlotte. He is a widely published health reform columnist.