How the Democrats Finally Took on Big Pharma

Voters have been exasperatingly slow to credit the Democrats with managing a successful economy. But under a tall pile of discouraging poll data, there’s one bright spot: The public has consistently trusted President Joe Biden more than Donald Trump on health care. A June 2024 poll by Hart Research favored Biden on health care over Trump, 45–40, and congressional Democrats over congressional Republicans, 46–37. Voters are right to rate the Democrats superior on health care. Now they just need to recognize that health care kind of is the economy.

Health care is the single largest industry in America. It employs 20 million people—more than any other sector—and it accounts for 17 percent of gross domestic product. Health care is also the industry in which the federal government makes its largest annual investment. Aside from defense (which accounts for a much smaller part of the economy), there is no industry sector over which the president maintains comparable control. It therefore makes no sense to tell a pollster Trump is the better economic steward (as many still do) when Trump has no clue how to manage the health economy.

It’s well established that Trump’s health care policies literally killed people. On Trump’s watch, deaths from Covid were 40 percent higher in the United States than in Canada, France, Germany, Italy, Japan, and the United Kingdom, according to a commission assembled by the British medical journal The Lancet. Not all of this was Trump’s fault, the commission said, but Trump policies such as eliminating the National Security Council’s global health security team and leaving 700 jobs unfilled at the Centers for Disease Control and Prevention accounted for “tens of thousands of unnecessary deaths.” Beyond the pandemic, Trump’s three Supreme Court appointments allowed the high court to overturn Roe v. Wade. By encouraging doctors to end potentially dangerous pregnancies, Roe had reduced maternal deaths by 30 to 40 percent. After Dobbs, a 64 percent majority of ob-gyns surveyed by KFF (formerly the Kaiser Family Foundation) said the decision increased maternal deaths. As recently as November 2023, Trump said on Truth Social that Republicans “should never give up” trying to repeal Obamacare, about which 62 percent of all adults hold a favorable view, according to a May 2024 poll by KFF. Nine years after Trump pledged to replace the Affordable Care Act, or ACA, with “something terrific,” the ex-president has yet to propose any serious alternative. To create some illusion of activity, Trump near the end of his presidency signed an executive order guaranteeing health insurance for patients with preexisting conditions—even though the Affordable Care Act had done that already. The 2024 Republican platform describes the party’s health care position in a grand total of 46 words, all of them extremely vague (“transparency,” “choice,” “affordable,” etc.).

Trump is so clueless about health care that he never even touts his sole meaningful accomplishment in this area. That was to sign into law the 2017 Over-the-Counter Hearing Aid Act, which ended the prescription monopoly on hearing aids. Hearing aids are not covered by Medicare, and allowing over-the-counter versions made them available at a fraction of the price—an enormous benefit to the highly prized elderly vote. I find no evidence that Trump has ever sought credit for this. Maybe he’s queasy that the bill was sponsored by Democratic Senator Elizabeth Warren of Massachusetts. Maybe he signed it only because it was tucked into a larger reauthorization for the Food and Drug Administration. Possibly he just doesn’t know cheap over-the-counter hearing aids came onto the market, or that he played a role in making it happen. (Biden, by contrast, signed an executive order that required the FDA to move swiftly in issuing a regulation necessary to get over-the-counter hearing aids into pharmacies and issued a written White House statement when the rule came out in August 2022.)

Republicans know this isn’t their issue. A survey by the Wesleyan Media Project of TV ads for House and Senate candidates during the first five months of 2024 found health care mentioned in only 4 percent of all Republican ads, ranking it dead last among the seven topics surveyed—lower even than abortion, mentioned in 6 percent of Republican ads. (The other topics surveyed were energy/environment, guns, immigration, inflation, and public safety.) Democrats, by contrast, mentioned health care in 20 percent of all ads, ranking the topic second after abortion (mentioned in 23 percent of Democratic ads). Democrats should be touting their health care policies in 100 percent of their ads.

Health Care Reform Matters to Voters

The Republicans’ disadvantage on health care wouldn’t matter politically if voters didn’t care much about the cost of health care, but they do—even when pollsters separate it from the economy. “There’s the economy,” Brad Woodhouse, executive director of the health care public interest nonprofit Protect Our Care, explained to me. “There’s the border. There’s democracy. And there’s health care. Health care is always in the top three or four.”

The Democrats have a superb health care record to run on. In the 2022 Inflation Reduction Act, or IRA, which cleared the House and Senate without a single Republican vote, Biden capped the price of insulin at $35 per month for Medicare patients, prompting three drug companies representing 90 percent of the global insulin market to drastically lower the prices they charged private insurers. “The insulin makers saw the writing on the wall,” said Larry Levitt, executive vice president for health policy at KFF, “and voluntarily moved to cap patient costs.” For some (but not all) insulin products purchased through private insurance, the manufacturers brought co-pays all the way down to Medicare’s $35. Subsequently, Vermont Senator Bernie Sanders jawboned the four major manufacturers of inhalers into placing a voluntary $35 cap on their products (which previously had sold for as much as $470). If you’re one of the 81 million people who have diabetes, asthma, or chronic obstructive pulmonary disease (which is to say roughly one-quarter of the U.S. population), you have a very good reason to vote Democratic.

The IRA also required Big Pharma, for the first time, to haggle with the federal government over prices for Medicare drugs. That reform had been sought, unsuccessfully, by Republicans and Democrats alike for more than 20 years (30 if you count President Bill Clinton’s failed health care reform bill, which predated by a decade President George W. Bush’s creation of a Medicare drug benefit). Clinton, Dubya, Barack Obama, and Trump all wanted Medicare to negotiate volume discounts for the drugs it purchased. (Or said they wanted to. In 2019, when House Democrats took up the matter, Trump opposed them and parroted a key Big Pharma talking point on Twitter: “FEWER cures! FEWER treatments!”) Only Biden delivered—again, without a single Republican vote.

Starting next year, the IRA will cap annual out-of-pocket Medicare drug costs at $2,000; already it’s capped for most Medicare recipients, thanks to another provision in the IRA, at around $3,500. In his 2024 State of the Union address, Biden urged Congress to extend that $2,000 annual out-of-pocket cap to private insurers. In addition, the IRA eliminated Medicare’s 20 percent co-pay for most vaccines. If you’re one of the 51 million people enrolled in Medicare’s voluntary drug insurance program, you have a very good reason to keep the White House Democratic, and to vote against any Republican who sat in Congress when the IRA passed.

Trump and congressional Republicans inflicted considerable damage on Obamacare as part of their effort to eliminate it. Most notably, they eliminated the “individual mandate,” which required all Americans to purchase health insurance or pay a tax penalty. Trump also eliminated federal cost-sharing payments to insurers. Predictably, these two policies drove up premiums in Affordable Care Act state marketplaces by as much as 32 percent in 2018 alone. Trump also cut advertising for ACA sign-ups by 90 percent; cut funding for “navigators,” the federally funded nonprofits that helped consumers sort through their choices, by more than 80 percent; and halved the enrollment period from 90 days to 45. As a consequence of these three actions, the proportion of adults aged 18 to 64 who lacked health insurance rose under Trump from 12 percent in 2016 to 14 percent in 2020.

Biden (famously caught on a hot mic telling President Obama, at the 2010 ACA signing ceremony, “This is a big fucking deal!”) did the opposite. Biden restored funding for ACA advertising and navigators at or above their pre-Trump levels. Biden’s 2021 Covid stimulus bill expanded subsidies for lower-income buyers to purchase ACA coverage, and Biden’s IRA subsequently extended those subsidies through 2025. Thanks to these changes, the proportion of adults aged 18 to 64 who lack health insurance has fallen from Trump’s 14 percent in 2020 to 8 percent, an all-time low. If you’re one of the record 21 million people currently enrolled in Obamacare (45 million people when you include the ACA’s Medicaid expansion, which translates to fully 13 percent of the U.S. population), then you have a very good reason—again—to keep the White House Democratic, and—again—to vote against any Republican who sat in Congress when the IRA passed. Did I mention that, as recently as March, the Republican Study Committee—to which 80 percent of all House Republicans belong—proposed eliminating Biden’s expanded ACA subsidies?

The Historic Insulin Cap

Of all the Democrats’ achievements in health care, the most concrete and visible is the $35 Medicare cap on insulin. If voters know anything about the Biden administration’s record on health care, they know that. But that isn’t saying much, because—exasperatingly—the vast majority don’t know. A May 2024 poll by KFF found that only 35 percent of voters were aware this law existed, up from 28 percent last November. The proportion was higher for voters over age 65 (52 percent), who benefit most directly from the policy. That was up from 44 percent in August 2023. But in the June 2024 Hart Research poll, only 29 percent of all voters showed awareness that the insulin cap was achieved by the Democrats.

Trump has done his best to create confusion about this. “Insulin, it was destroying families, destroying people, the cost,” Trump said at a September 2020 presidential debate. “I’m getting it for so cheap it’s like water, you want to know the truth.” What Trump actually did was create a voluntary Medicare program in which private insurers could cap patients’ insulin costs at $35 in exchange for charging higher premiums. Fewer than half of all Medicare plans did so. Nonparticipating insurers remained free to charge more than $35, and they did. The Democrats, through the IRA, made it illegal for insurers to charge Medicare patients in excess of $35.

The House Republican Study Committee proposed repealing this price ceiling in March. Undaunted, Trump went on Truth Social in June to claim that “Low INSULIN PRICING was gotten for millions of Americans by me, and the Trump Administration, not by Crooked Joe Biden.” Multiple news outlets explained to readers that this was misleading at best. CNN had the presence of mind to query the Trump campaign about whether the candidate favored, as Biden did, extending the $35 cap to private insurers. In 2022, Senate Democrats had been blocked by their Republican counterparts from including such a measure in the IRA after it cleared the (then Democratic) House. Was Trump now saying he favored an insulin price cap in the private market? His campaign gave CNN no reply.

Before the IRA took effect, insulin was more than nine times as expensive in the United States as in 33 comparable nations in the Organization for Economic Cooperation and Development, according to a RAND Corporation report. That insulin should be expensive anywhere made no obvious economic sense. It wasn’t a newly invented miracle drug extracted from some rare plant in the Amazon jungle. Insulin was not, in fact, invented at all. It was discovered, 103 years ago, inside a dog. Insulin is a hormone produced by the human (and canine) pancreas that removes glucose (sugar) from the bloodstream and distributes it to the body’s cells, where the glucose gets converted into energy. When the pancreas can’t produce enough insulin—or any insulin at all—glucose builds up in the bloodstream. That’s diabetes.

Insulin’s discoverers were two Canadian scientists: Frederick G. Banting and Charles H. Best. A third Canadian, James B. Collip, purified canine insulin sufficiently that it could be used to treat humans, prompting the granting of an American patent to all three in 1923. To make insulin available as widely as possible, they sold the patent for $3 to the University of Toronto. Anticipating Jonas Salk’s later and more famous declaration about patenting his polio vaccine (“could you patent the sun?”), Banting said: “Insulin does not belong to me. It belongs to the world.”

From the 1920s through the 1970s, animal insulin (derived from cows and pigs) really did belong to the world. Even with various critical improvements, it remained inexpensive. But starting in the 1980s, insulin prices began rising. Initially that was because genetic engineering made human-derived insulin possible for the first time. Human-derived insulin was presumed to be better, so it drove cheaper, pig-and-cow-derived insulin out of the U.S. market—even though the human variety’s clinical advantage was slight. The introduction of synthetic analogs in the late 1990s sped up how quickly an insulin injection takes effect. That’s a huge advantage for patients with Type 1 diabetes, the more severe variety. But Type 1 accounts for only about 5 percent of all cases. Nearly all the remaining 90 to 95 percent are Type 2, where it doesn’t typically matter how fast insulin takes effect. Even so, analogs largely displaced human-derived prescriptions for both Type 1 and Type 2 patients, boosting insulin’s price further.

Expensive though these developments were, they were insufficient to account for a near-tripling in prices for the most popular insulin products between 2002 and 2013. Insulin prices for Type 1 patients subsequently doubled between 2012 and 2016. In response, 25 to 30 percent of diabetics in the United States put their health at risk by cutting back on insulin.

Here, the main culprit was market concentration. In the United States, three drug companies dominate the insulin market: Eli Lilly, Novo Nordisk, and Sanofi. In multiple instances, this triumvirate has been observed engaging in “shadow pricing,” wherein an insulin price increase from one instantly prompts a price increase from the other two. That isn’t illegal if there’s no collusion. But it’s characteristic of highly concentrated markets.

In theory, shadow pricing creates an opening for a low-priced competitor to enter the market. Patents pose few obstacles here, because most insulin patents have expired or will do so soon. Why didn’t some scrappy startup seize the opportunity to sell cheap insulin generics or biosimilars? Because the Big Three insulin manufacturers retain patents on insulin delivery devices like pens or pumps that can be used only with that company’s insulin.

Insulin’s price has also been driven up by consolidation among pharmacy benefit managers. PBMs are intermediary companies that negotiate drug purchases for employer-sponsored health plans. The idea is that they’re supposed to lower how much employers and patients pay for drugs; often they do. But PBMs, too, have consolidated into a triumvirate—CVS Caremark, Express Scripts, and OptumRx—whose market share is now 80 percent, enabling an unprecedented level of self-dealing at the patient’s expense.

The Federal Trade Commission in 2022 cited insulin specifically in describing a dubious business practice by drug companies and PBMs that FTC Chair Lina Khan likened to a kickback scheme. Manufacturers jack up a drug’s price artificially and then pay PBMs a large rebate. The customer then pays through the nose because the co-pay is a fixed percentage of the sticker price. The FTC (whose budget House Republicans are trying to decimate) said it would “closely scrutinize” the practice and weigh prosecutions under antitrust law.

In the meantime, the Democrats’ $35 cap has made Tommy Marshall’s life a lot easier. Marshall runs a small consulting firm in Atlanta that advises banks and financial services companies. He has Type 1 diabetes, the rarer and more severe kind, and for the past few years he’s had to give himself an insulin injection—the fast-acting analog—at every meal.

Marshall is 56, which means he’s ineligible for Medicare. He gets his health insurance from his wife, who works at a local university, where the benefits are pretty good. Even so, last year Marshall was paying $300 per month for insulin. Six times per year he’d purchase a two-month supply. Marshall’s health plan limits out-of-pocket spending on drugs, so his $600 tabs were gone by summer. But wintertime trips to the pharmacy were brutal.

That changed in December, when Marshall discovered his monthly insulin co-pay dropped from $300 to $150. Novo Nordisk, which makes his insulin, had announced the previous March that its insulin prices would drop up to 75 percent in 2024. “We have been working,” Steve Albers, a Novo Nordisk senior vice president for market access and public affairs, said in a press release, “to develop a sustainable path forward that balances patient affordability, market dynamics, and evolving policy changes.” (Translation: The Democrats have imposed a $35 monthly Medicare ceiling. They want to do the same in the private market. Maybe this will slow them down.) The insulin monopolists are feeling the heat. It’s doubtful they’ll feel much pressure to make additional concessions if Trump wins in November.

“Democrats have an advantage on health care today,” Hart Research’s Geoff Garin told me, “and have the opportunity to grow that advantage substantially between now and the election.” Yes, Biden and the Democrats outpolled Trump and the Republicans on health care, Garin wrote in a June memo to Protect Our Care, “but still, less than a majority know that they have done a lot or some to address the issue of healthcare costs.” That proportion has to grow.

To that end, Woodhouse told me, Protect Our Care is spending $8 million or $9 million in digital ads to spread the word in targeted congressional districts. “The Inflation Reduction Act lowered insulin prices for America’s seniors,” says one ad. “Representative David Schweikert voted against it.” (Schweikert is an Arizona Republican.) Similar ads were made about House Republicans David Valadao and Mike Garcia of California, Brett Guthrie of Kentucky, and Mike Lawler of New York—all but Guthrie are vulnerable this year. Protect Our Care also launched ads describing more favorable health care votes by 11 Democrats, including Matt Cartwright of Pennsylvania and Gabe Vasquez of New Mexico, who are in competitive races.

“People don’t know what you can do about high food prices,” said Garin. “But they know health care costs are something elected leaders can and should do something about. This is an issue on which there is a very clear and compelling contrast … between Democrats in Congress and their Republican counterparts.” That contrast is vitally important, and it’s the Democrats’ job to make sure it does not go unnoticed.