Elections have consequences

Jon Bigelow, Thayer Pond Solutions

Elections have consequences

By Jon Bigelow • Executive Director of the Coalition for Healthcare Communication

This has been a year like no other, an election campaign like no other, and now a Presidential transition like no other. Here’s a glimpse at President-elect Biden’s likely healthcare priorities for 2021.

Reality check

Joe Biden won with 306 electoral votes and a margin of roughly 6 million popular votes – a decisive outcome that normally would give the President-elect a mandate. Yet his scope of action will be constrained.

He probably will begin his first term facing a slim Republican majority in the Senate, meaning Sen. Mitch McConnell (D-Ky.) will determine what bills come up for a vote and Republicans will chair all committees. Even in the event that Democratic candidates win both Georgia seats in run-off elections on Jan. 5 – creating a 50-50 split, where Vice President-elect Kamala Harris can cast tiebreaker votes and Democrats control committees – the President-elect would need to hold every single Democratic Senator’s support on even routine votes and nominations. Any effort to end the Senate filibuster is dead on arrival, so Mr. Biden will need 60 votes for any major legislation other than bills that can be characterized as falling under the budget reconciliation process (where a simple majority wins).

Less widely remarked is that with a narrowed Democratic majority in the House, Speaker Nancy Pelosi (D-Calif.) will be challenged to hold both moderate and progressive support for each of the President-elect’s initiatives.

Plus a wild card: Usually the departing president maintains a low profile. Now, for the first time since Herbert Hoover, a former president is threatening to run for re-election to the office, and unlike Hoover, President Trump has a Twitter account.

Priority 1: Fight the pandemic 

COVID-19 case counts have been soaring, and the situation may be far worse by Inauguration Day. Clearly the first year of the Biden administration will be dominated by response to the pandemic – notably, through restoring faith in public health measures, efficient distribution of a vaccine, and efforts to bolster the economy and aid financially pressed state and local governments.

Mr. Biden promises a more forceful national response than under President Trump, guided by “science, not fiction.” He wasted no time in naming a new Coronavirus Advisory Group. All of the candidates prominently mentioned to lead Health and Human Services, the Food and Drug Administration, and the Centers for Medicare and Medicaid Services have strong credentials and would likely be reassuring choices for industry. Having led the “cancer moonshot” initiative, President-elect Biden understands the drug approval process far better than most politicians. He will give career officials a more visible role in setting COVID-19 policy as part of his effort to rebuild confidence in the process.

Jon Bigelow

Legislatively, Mr. Biden’s initial priority will be a COVID-19 economic stimulus package. He will make this as large and comprehensive as possible, both due to the scale of the problem and the possibility that he will get only one opportunity at a major bill. Ingredients will include pandemic-related relief funds for individuals, businesses, and state and local governments, as well as funding for public health efforts and vaccine distribution. Mr. Biden is expected to fold in some elements of his “Build Back Better” agenda for infrastructure and green energy initiatives. 

Priority 2: The ACA 

Candidate Biden’s second healthcare priority was expansion and strengthening of the Affordable Care Act (ACA). Now he is unlikely to win Senate approval for his proposals to add a public option, expand tax breaks to middle-income levels, and lower eligibility for Medicare to age 60. Still, expect Mr. Biden to use regulatory processes and Executive Orders to strengthen the ACA on the margins, for example by restoring the budgets for marketing the plans and for “navigators” to help sort through patients’ options.

The Supreme Court will rule this spring on the constitutionality of the ACA. If the ACA is thrown out, finding a solution will be an immediate need. Depending on what flaws the Court points to, Mr. Biden might be able to propose modest fixes – for example, a nominal tax penalty to support the individual mandate – that could be acceptable to a handful of Republican Senators when confronted with the alternative of having 23 million Americans lose coverage – and tens of millions lose protection for pre-existing conditions and other important guarantees – in the middle of a pandemic. 

A new fiscal reality

Candidate Biden offered strong proposals intended to lower prescription drug prices, but under the circumstances these are unlikely to be legislative priorities in the first few months. The problem isn’t going away, however, nor is the political pressure on both parties to take some action. There is considerable overlap between the positions of Democrats and Republicans in Congress, and room for compromise; also, given the new fiscal reality – multi-trillion dollar federal deficits, even before any additional spending initiatives – there will be increased interest in reducing Medicare and Medicaid spending on pharmaceuticals. 

Even absent a specific initiative on drug pricing, some restrictions could be added to other legislative packages to offset other costs. Mr. Biden could also look for regulatory approaches, but with more attention to detail and process than President Trump has shown. An early question will be whether he supports the rushed rule-making President Trump announced in mid-November for a “most favored nation” pricing scheme for drugs purchased under Medicare part B.

That new fiscal reality also resurrects the threat to remove the tax deductibility of marketing expenses, either specifically for direct-to-consumer advertising (an idea Biden has endorsed) or more broadly for all pharma marketing. Congress and the new president will be looking for cost offsets in other legislation and no one wants to increase middle-class taxes, especially during a recession; they would likely view a marketing tax as a more palatable choice.

As improved public health measures and, we all hope, a successful vaccine roll-out bring the pandemic under control, greater attention will turn to controlling health care costs, the next PDUFA legislation, and regulating data privacy at the federal level, among issues of particular concern to Coalition members. For now, President-elect Biden has a full plate.