Former HHS Secretary Donna Shalala (right) holds her rescue dog, Fauci, at the end of her talk yesterday during the 340B Coalition winter conference.

Biden Will Turn to Drug Pricing Once COVID-19 Ebbs, Shalala Predicts

President Biden will likely turn to lowering drug prices once the COVID-19 pandemic stops demanding so much of his attention, Donna Shalala, U.S. Health and Human Services (HHS) Secretary during both of President Clinton’s terms in office, predicted in a question-and-answer session yesterday during the 340B Coalition winter conference. Shalala also served in Congress until 2020.

Shalala was HHS Secretary during the implementation of the 340B drug discount program. She said she has always been supportive of the program and is well aware of its importance due to her many years living in Miami. After her HHS tenure, she served as President of University of Miami. She referenced Jackson Health System, the 340B hospital in her former congressional district, and the health centers in South Florida as playing an important role in educating her on the topic.

The key to lowering drug prices is clear, Shalala said. “There is no substitute for allowing the secretary of HHS to negotiate directly with the drug companies on behalf of Medicare.” Prices determined by those negotiations, she said, should be available to private insurance companies, as would have been allowed under H.R. 3, the U.S. House-passed drug pricing bill during the last session of Congress.

“I think Biden will get to it,” said Shalala, who was defeated in November in her bid for reelection to the House. “Americans don’t understand why Canada can have lower drug prices. Well, Canada negotiates drug prices on behalf of Canadians, and it gets lower prices based both on quantity and quality. We just have to figure it out in a way that does not destabilize the delicate balance we have between pharma, our great academic health centers, and the NIH [National Institutes of Health].”

Obtaining power for the HHS secretary to negotiate drug prices is “not going to be an easy thing because of the power of big pharma,” Shalala said. “But it’s certainly reasonable.” Shalala said she believes drug manufacturers are raising prices now “in anticipation of the real possibility of negotiation by the administration.”  

340B Health President and CEO Maureen Testoni, Shalala’s interviewer during the session, asked her what she thought was keeping federal drug price negotiation from moving forward.

“We have to convince enough Republicans to go forward,” Shalala said. “I think will get somewhere, but it will take time because COVID is consuming all of the oxygen now.”

The Democratic controlled Congress might move on drug price negotiation at a faster pace than Shalala expects. According to press reports, Rep. Pramila Jayapal (D-Wash.), Chair of the House Progressive Caucus, told reporters on a call yesterday her caucus wants to use H.R. 3 as the foundation for an even more ambitious drug price negotiation bill that would expand both the number of drugs to be negotiated and the range of payers able to benefit from the negotiated prices.

Also yesterday, Sen. Bernie Sanders (I-Vt.) released a Congressional Budget Office Report that found that Medicare Part D “pays far more than any other federal health program for prescription drugs.” The report, which Sanders commissioned, mentioned the 340B program but did not include 340B ceiling prices among its comparisons.

“There is no rational reason why Medicare pays nearly three times more than Medicaid and about twice as much as the VA for the same exact medicine,” Sanders said in a news release. “Negotiating directly with pharmaceutical companies will substantially reduce the price of prescription drugs, and it is a national embarrassment that the Secretary of Health and Human Services is prohibited from doing that on behalf of the more than 40 million Americans who get their prescription drug coverage from Medicare Part D. It is time for Congress to take on the greed of the pharmaceutical industry and require Medicare to negotiate lower drug prices.”

Other highlights from Shalala’s remarks to the 340B Coalition event attendees:

  • Shalala was asked what advice she would give Xavier Becerra, whose nomination to be HHS secretary will be considered by two Senate committees next week. She recommended meeting in person with members of Congress and their staffs, especially with newly elected members. “Personal relationships make a big difference,” Shalala said. “Small touches will give you better access and a warmer reception.” Shalala was asked about bipartisanship amid today’s deep political divisions. “Working across the aisle means having to find people who are interested in the subject matter,” she said. She advised Becerra to “think of yourself as nominated by the president, confirmed by the Senate, but serving all of the American people. It means doing your best to understand a Republican point of view, an independent point of view, and being respectful.”
  • Shalala said the Children’s Health Insurance Program, passed into law in 1997, sprang from the failure of then-First Lady Hillary Clinton’s plan to provide universal health care for all Americans. “You fail at one thing, but now you’ve got some relationships, and you bounce back with a narrower approach and a very clear message,” she said. “If you hit a brick wall, just turn around and go in another direction. There’s always another hole you can run through.”
  • Asked for her advice on advancing health equity, Shalala, a south Floridian, said it was important to understand multiculturalism within the African American community. “My community, it’s Afro-Caribbean—it’s Venezuelans, Colombians, Cubans, Bahamians. It’s people from all over Latin America, in addition to the more traditional African American community. You have to understand the cultures and have different approaches.” Shalala also said health care has failed to make alliances with important actors in African American civil society such as churches, sororities, and youth organizations. “You have to go to those organizations to reach out and touch the populations you want to reach.”
  • Shalala lamented the slow pace of getting Biden administration cabinet members and key officials approved by the U.S. Senate. She pointed out that she was approved one day after inauguration and already had a staff in place. Coalition conference attendees received a special treat at the end of her talk when she embraced her new rescue dog, Fauci.
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