Prescription drug law highlights differences between Kyrsten Sinema and Ruben Gallego

Sen. Kyrsten Sinema and Rep. Ruben Gallego both helped pass a law that caps insulin costs for seniors on Medicare at $35 monthly, and both are emphasizing the issue as a sign of what they have done in Washington.

But the prescription drug-pricing issue is one of the clearer examples of what separates the political rivals.

Sinema, I-Ariz., helped shape the final legislation. Her critics say she prevented it from providing more help to more people more quickly and some point to her financial support from the pharmaceutical industry as a likely reason why.

Gallego, D-Ariz., voted for the final measure and urged a more ambitious approach in the first place. His critics say that he had little impact in shaping or pressing the matter and supported a plan that would have made future drug development more difficult.

Gallego is running for Sinema’s seat next year, while Sinema has quietly campaigned for months without formally saying she is seeking a second term.

A Sinema mailer this summer said she “negotiated and delivered” laws capping insulin costs and lower the cost of “expensive prescription drugs.”

In June, Gallego tweeted, “In Congress, I’ve worked across the aisle to deliver wins for Arizona families that cut the cost of prescription drugs.”

Part of their differing roles is the reality that the narrow partisan divide in the Senate and the legislative filibuster favored by Sinema effectively limits many single-party bills from advancing. Any deal last year needed the then-Democrat and had to meet specific parliamentary criteria.

As Gallego and Sinema circle each other in their distinct styles, the issue of prescription drug reforms could linger as a broader measure of what personal and policy approach Arizona voters want most.

None of the Republicans running or rumored to be considering it indicated they supported the drug-pricing plan, which was tied up in $700 billion of spending, largely around mitigating the effects of climate change.

The prescription drug law involved compromise that is alternately seen as a sellout or realpolitik.

“Ruben’s point is you can always do better,” said Chuck Coughlin, president and CEO of HighGround, a Phoenix-based political consulting firm. “But you can’t always do better if it can’t be done. The Senate is a more integral place in order to craft policy, which has been demonstrated by her ability on a number of issues. His criticism may be valid, but not in a political context.”

Norman Ornstein, the author of books on politics and Congress and a senior fellow emeritus for the American Enterprise Institute, said Gallego never figured to have a leading role in the drug-pricing legislation because he wasn’t on the committee principally shaping the bill in the House. The Senate’s narrow partisan margins meant Sinema always could be, he said.

“Sinema was always going to be a factor, not because she’s a giant in the Senate but because they were going to face the headwinds of a Senate where if you didn’t get every single Democrat, you were going to fail,” he said. “Her vote was a critical one.”

“Put it this way,” Ornstein said, “if the Senate had been 55 Democrats and 45 Republicans, we wouldn’t be looking at her in the same way as a pivotal player.”

For their part, Gallego and Sinema defended their records on an issue where they largely overlap, but where their legislative approach sets them apart.

“Ruben Gallego has been a longtime proponent of cutting the cost of prescription drugs for Arizonans, and he has the record to back it up,” said Hannah Goss, a spokesperson for Gallego’s Senate campaign. “The pharmaceutical lobby has enough people fighting for them in the Senate — Ruben will not be one of them.”

Hannah Hurley, a Sinema spokesperson, said Sinema is still working in a bipartisan way on other health care issues to build on what she has already done.

“Kyrsten delivered laws that make health care more affordable and accessible for Arizonans by personally negotiating policies capping the cost of insulin and lowering the cost of prescription drugs for seniors, while saving taxpayer dollars and protecting continued innovation so new lifesaving medications and treatments can be brought to market,” Hurley said.

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Congress takes on drug prices

Congress periodically has addressed the cost of prescription drugs over decades.

In 1990, for example, a Democrat-led Congress required pharmaceutical manufacturers to rebate costs to state Medicaid programs based on discounts they offered to other large purchasers.

It was part of sweeping legislation credited with helping reduce the government’s annual budget deficit at the time but is most remembered as breaking then-President George H.W. Bush’s campaign pledge not to raise taxes.

In 2003, Republicans in Congress passed changes to Medicare that created the prescription drug entitlement program known as Part D. That law set limits on initial drug costs for seniors but required them to pick up charges over those limits until they qualified for catastrophic coverage.

It specifically barred Medicare from negotiating prices in bulk.

The 2009 health care overhaul informally known as Obamacare increased the rebate costs to drug companies for Medicaid and closed what was called the “donut hole” in Medicare Part D coverage.

Biden era presented an opening

As President Joe Biden took office and with Democrats controlling both chambers of Congress, the party set out to go even further on drug pricing.

By late 2021, many Democrats favored an aggressive plan to allow the government to negotiate on all drugs covered by Medicare that was phased in more quickly. Sinema supported a plan closer to that pressed by Rep. Scott Peters, D-Calif.

One key difference between Sinema and Peters was the cost of insulin: His allowed up to $50 monthly charges while hers capped it at $35.

Pharmaceutical executives and many Republicans have argued their prices reflect the high cost of drug development and predict that cost controls will inhibit new medications.

As Democrats sought to move the issue forward, Sinema emerged as a holdout who wanted a more limited deal. It came as Center Forward, a politically active nonprofit that advocates for “common sense solutions” on policy matters and received more than $1 million annually from the pharmaceutical industry, ran $600,000 of digital ads praising her.

They described her as an “independent voice” and a “bipartisan leader,” according to the New York Times. It was only part of a lobbying blitz on Capitol Hill by the pharmaceutical industry intended to stymie pricing changes.

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Sinema reaches compromise deal

Sinema met personally with Biden over the issue and eventually provided key support for a deal that limited the out-of-pocket costs to patients and opened up direct government negotiations for 50 popular drugs by the end of the decade.

Sinema’s office called the deal “a historic, transformative” plan that would save money for seniors, cut government spending and protect pharmaceutical development.

But the measure remained bottled up for nearly another year as Sinema and Manchin also balked at a $3.5 trillion plan that would have included most of Biden’s domestic policy initiatives.

The eventual legislation came about after Manchin unexpectedly reached an agreement on a slimmed-down package.

That momentarily left Sinema as the lone Democratic holdout.

Her belated support for the resulting $700 billion Inflation Reduction Act didn’t involve prescription drugs. It only came after Democrats removed provisions that would have ended a tax break known as carried interest worth an estimated $14 billion for very-high income taxpayers, including hedge fund managers.

She ensured the inclusion of $4 billion in drought mitigation for the Southwest as well, but her efforts benefiting the nation’s wealthiest taxpayers only deepened calls by her critics for her to face a Democratic primary in 2024.

In the end, Sinema helped pass the IRA and played a key role in the final prescription drug plan that helped finance much of it.

“You could argue that Sinema was a pivotal player,” Ornstein said, “but the pivotal part of her playing was her protecting the carried-interest provision, not the prescription drug provision. In a way, it was her using her leverage.”

Gallego wanted a different plan

Gallego voted for the Senate plan, which passed the House on a party-line vote.

But it was clearly later and less than what he favored.

In 2019, for example, Gallego voted for a bill introduced by Rep. Frank Pallone, D-N.J., that would have more quickly implemented negotiations for Medicare. That bill passed the House and died in the GOP-controlled Senate without a vote.

Pallone tried a similar bill in 2021, but found resistance even from a fellow Garden State Democrat. Sen. Bob Menendez, D-N.J., didn’t back that plan, saying it didn’t assure patients would see savings, only the government.

“My goal, which I have not seen in any proposal so far, is to ensure that the consumer at the counter gets relief and not just simply the government,” Menendez said a week before Sinema clinched her deal with the White House.

Gallego wasn’t on the House Energy and Commerce Committee that led efforts on prescription drug bills, and Democrats had enough votes to push through any bill passed by the Senate, even if the left wing of the party viewed the legislation as overly modest.

Beyond that, major policy changes only originate in the Senate these days, Coughlin said, adding that it requires discipline to shepherd bills into laws.

“How do you get compromise done?” he asked. “It only happens because somebody in a position of authority is there to manage that issue through the process. It’s one thing to be a back bencher in the minority of the Congress. It’s a whole other thing to be leading on a policy issue.”

Why the law mattered

The drug-pricing bill had at least two important components.

First, it punishes drugmakers for drug costs rising faster than inflation. Americans pay far more for many prescription drugs than citizens in other industrialized countries, a fact that pharmaceutical companies often say is because of the high cost of developing a drug that passes the government’s many tests.

Second, by allowing Medicare to bargain with drugmakers, the government is expected to command lower prices. The nonpartisan Congressional Budget Office estimated it would save the government about $237 billion in spending costs over a decade through the leverage of its massive buying power.

Republicans didn’t want the legislation at all, and some Democrats complained that an earlier version would have brought an estimated $450 billion in reduced future spending.

As it was, Manchin blamed Sinema for not allowing the prescription plan to save more.

“We had a senator from Arizona who basically didn’t let us go as far as we needed to go with our negotiations and made us wait two years,” he said of the resulting deal on drug prices.

Sinema took far more industry cash

Both Sinema and Gallego have collected campaign contributions from the pharmaceutical industry, though she has taken far more.

According to Open Secrets, a nonpartisan organization that tracks money in politics, Sinema took in $614,000 from the pharmaceutical industry between 2017 and 2022. In the same period, Gallego collected nearly $53,000.

Part of that reflects the different costs of running for the House and the Senate.

In the 2022 election cycle, Sen. Raphael Warnock, D-Ga., received the most support from drugmakers, about $771,000, according to Open Secrets. In the same period, Rep. Cathy McMorris Rodgers, R-Wash., took in the most in the House, $419,000.

In the current cycle, however, Gallego and Sinema could be running against each other, and the industry quickly gave to Sinema’s campaign, though she remains officially undeclared.

Her campaign and affiliated political-action committees have collected $103,000 from those in the pharmaceutical industry this year.

Gallego’s campaign and an affiliated PAC have taken in at least $2,500 from those in the industry.

While the industry has shown a clear preference for her to this point, they have also made plain they aren’t fans of the drug-pricing law.

A PAC affiliated with Pfizer made a maximum contribution to a pro-Sinema PAC earlier this year. As the IRA came together in 2022, Albert Bourla, Pfizer’s CEO, made clear to investors he was not a fan of the law she helped bring together.

“I want to say it is very disappointing that they are choosing to single out one industry,” he said. “There are specific measures to affect only the pharma industry, particularly when we are out of a pandemic, where this industry has proven the value that brings to public health and to the global economy. We would be in a very different point in this global economy if we didn't have the investments in the thriving life sciences sector. And they are choosing to single out this industry. I think it’s wrong.”

More action to come on pharmaceuticals?

Beyond the existing changes on prescription drugs, both Sinema and Gallego are advocating additional legislation on pharmaceuticals.

Gallego backs a Democratic bill imposing new restrictions on pharmacy benefit managers, or PBMs, as they are known.

PBMs are organizations that negotiate prescription drug prices in bulk mainly for private insurance plans. Their larger buying power enables them to command spending rebates from drugmakers.

Pharmaceutical companies and skeptical lawmakers think PBMs are pocketing a growing share of their negotiated savings rather than returning it to insurers or patients.

In June, Gallego introduced the House version of a Senate bill that would extend inflation protections on prescription drugs to those purchased through private health insurance plans — not just those on Medicare. It would also base the inflation measure on 2016 prices, rather than 2021.

The Senate version, introduced in March by Sen. Catherine Cortez Masto, D-Nev., has nine Democratic cosponsors. Sinema isn’t cosponsoring the measure. Gallego’s House bill has one cosponsor, Rep. Elissa Slotkin, D-Mich., who is also running for the Senate in her state.

A similar House bill, introduced by Pallone a month after Gallego’s, has 59 Democratic cosponsors. Both measures face a dubious future in the Republican-controlled House.

Sinema is backing a different Senate bill relating to PBMs. It would require the Federal Trade Commission to report on anticompetitive practices within the prescription drug supply chain, including PBMs.

That bill, introduced by Sen. Chuck Grassley, R-Iowa, has 16 other cosponsors beside Sinema. Of those, seven are Democrats.

Ornstein said Sinema has had success shaping some bills while hindering others in a closely divided Senate. And Gallego is part of an institution where it’s harder to stand out.

“When it comes to the big things, she has been more of a thorn in the side of the majority than the mover and shaker,” Ornstein said. “It’s harder to judge a House member who is one out of 435 than it is to judge a senator who has individual weapons. Those weapons become far more meaningful when it comes to a Senate that’s 50-50 or 51-49.”

This article originally appeared on Arizona Republic: Prescription drug law highlights Sinema, Gallego differences