Rep. Schrader instrumental in shutting down drug cost reform bill

Congressman Kurt Schrader sat down for an hour-long with the Keizertimes last month. (KEIZERTIMES/ Brooklin Flint)

Keizer’s congressional representative Kurt Schrader cast a pivotal vote last week to shut down a bill that would have allowed the government to negotiate costs of prescription drugs with pharmaceutical companies. 

Schrader’s critics claim large donations from pharmaceutical companies influenced his vote. Schrader, who represents the 5th Congressional District in Oregon, refuted this claim during an interview with the Keizertimes and said the bill never had a chance of passing the Senate anyways. 

The bill, known as HR 3 or the “Elijah E. Cummings Lower Drug Costs Now Act,” would have allowed the U.S. Department of Health and Human Services to directly negotiate the costs of at least 50 of the 125 drugs that account for the greatest Medicare spending. The negotiated prices would have been offered under Medicare in addition to most private health insurances. 

The vote, which occurred in the House Energy and Commerce Committee on Sept. 15, ended in a 29-29 deadlock after Schrader joined Republicans and two other moderate Democrats. The tie meant the bill would not move forward to the House floor.

HR 3 was just one part of the $3.5 trillion reconciliation package Democrats are trying to pass. 

The drug cost reform bill was seen as one way to fund the package after a 2019 analysis by the Congressional Budget Office estimated the bill would lower Medicare spending by $456 billion.

Schrader’s main issue with the bill is a pricing index that wouldn’t allow the negotiated maximum price to exceed 120% of the average price in Australia, Canada, France, Germany, Japan and the United Kingdom. Schrader cited a Congressional Budget Office analysis that said while the bill would save money, it would also lead to fewer new medicines for patients. 

“The fact that we were the country that came up with more of the (COVID-19) vaccines quicker, that is no accident. That’s because of our ability to innovate, get things done in a quick manner,” Schrader said.

When asked why 120% of what international pharmaceutical companies make still isn’t enough for that innovation, Schrader said, “There’s no one hundred percent answer, you know, we’re trying to figure this out as we go. We just have the budget office’s remarks that innovation would be stifled if we did HR 3 like it is.”

In place of the rejected bill, Schrader and Rep. Scott Peters (D-CA) introduced the Reduced Costs and Continued Cures Act on Sept. 14. The bill is a more moderate approach to drug cost reform and would set a $1,200 annual out-of-pocket cap on drug costs for most seniors. The biggest difference, according to Schrader, is that his bill actually has a chance of passing.

“I could dream up any bill that says this, that, and the other thing, but unless it has a chance of actually becoming law it’s worthless. Our bill actually has a chance of becoming a law,” Schrader said. 

Schrader, along with the two other moderate Democrats, has faced sharp criticism from the left following the Sept. 15 vote. In a statement following the vote, Senator Bernie Sanders said, “I understand that the pharmaceutical industry owns the Republican Party and that no Republican voted for this bill, but there is no excuse for every Democrat not supporting it.” 

Former US Labor Secretary Robert Reich tweeted on Sept. 15, “Two of the three Democrats who tanked the party’s proposal to allow Medicare to negotiate lower drug prices — Scott Peters and Kurt Schrader — together have received more than $1.7 million in donations from Big Pharma. Follow the money.”

According to The Oregonian, Schrader inherited a fortune from his grandfather, a former executive at Pfizer. Pfizer has donated the third-most money to Schrader and in total, pharmaceutical companies have given him over $600,000 since 2007, according to non-profit research website OpenSecrets.

But Schrader denies that this influences his work in Congress, saying he’s been tough on pharmaceutical companies over his career. 

“I just think my track record speaks to the other way. I’ve been pretty tough on those guys,” Schrader said.

He added that he takes “money from a lot of different groups,” and that he’s been “one of the leaders in campaign finance reform.”

It’s still possible that Democrats could add drug price negotiation through a different committee before the full $3.5 trillion package hits the floor later this fall. 

Schrader and the other moderate Democrats’ decision to vote against the bill signified how difficult it may be to pass the reconciliation package altogether. 

“I’m probably one of the more outspoken folks that are concerned about the level of spending envisioned in this reconciliation package overall,” said Schrader. “Why do we need to spend more money? I don’t get it. It’s time for business to step in and spend money. Pay people a good wage and start to produce some of the goods and services that are now short supply.”

Two groups, the Polk County Oregon Democrats and Lincoln County Democrats, organized a protest at Schrader’s office in Lincoln City on Wednesday, Sept. 22. Organizers said the rally was “in support of lowering drug prices and the Build Back Better Reconciliation Bill.”

News tip? Contact reporter Joey Cappelletti at [email protected] or 616-610-3093.