Canny observers have been pointing out for years that the DFL protests too much when it comes to Big Pharma.
Particularly Angie Craig, who perennially faces a tough re-election fight in CD2; I expect Craig’s biennial raft of ads driving around in a jeep and acting like a good ol’ Big Pharma-hatin’ girl, any day now.
But not only is it a relic of another political time, but the blossoming alliance between Big Pharma and the Democrats, particularly the DFL, is threatening the rural health systems that managed to survive MNSure and Obamacare.
A friend of the blog emails:
As Democrats’ relationship with the pharmaceutical industry has tightened in the wake of the COVID-19 pandemic – up to and including the President using OSHA as their marketing agency, not to mention all the states now serving as statutory cash cows for abortion and gender-transition meds – the newfound coziness between the left and the industry is playing out in a weird, underdiscussed way. In a bunch of blue states, Democrats have been lining up to help the pharmaceutical industry hammer a drug discount program that disproportionately helps rural, working class Americans—also known as Republicans.
The program is known as 340B. According to the Health Resources and Services Administration, “[Pharmaceutical] Manufacturers participating in Medicaid agree to provide outpatient drugs to covered entities at significantly reduced prices.” So, in exchange for getting access to Medicaid money, drugmakers have to sell some drugs at a discount to safety net health care providers. The people who use those providers are now disproportionately those rural, working class voters. Those drugs are then offered at a discount to patients who can’t afford them or sold at normal prices to patients who can afford them—either paying directly out of pocket, or more commonly, through insurance.
Where the latter happens, the providers pocket the difference which allows them to pay for more doctors and nurses. 57 percent of this type of hospital say that if 340B went away, it would “threaten their ability to stay open.” So the program is literally a lifeline for rural America.
A lot of taxpayers like the program because we’re not the ones paying for it. On the whole, drugmakers hate the program because they would ideally like to make full profit off of entitlements like Medicaid while selling no drugs at any discount.
Democrats used to be supportive of the program, while some Republicans used to be skeptical. Back in the 2000s and early 2010s, when the GOP was more the “Chamber of Commerce” party, the party lined up with Big Pharma far more. Now the party is more populist and less automatically pro-business.
And now that Democrats no longer have any real traction with rural voters, have found themselves aligned with Big Pharma on cultural issues, and are more concerned with winning votes from wealthy suburbanites whose stock portfolios often include pharmaceutical companies, it is perhaps not surprising that some of them are working to kill the program off by a thousand cuts.
Here in Minnesota, this is playing out in three ways.
First, last May, Minnesota passed a bill requiring 340B providers to report a bunch of data to the state including total acquisition cost for 340B drugs and total payment received for 340B drugs. This sounds innocuous enough except that if you’re a tiny rural hospital in Minnesota already operating on thin margins (or even in the red), any additional bureaucracy mandated by government presents you with a stark, and bad, choice: Spend money you don’t have on hiring an administrator to ensure compliance—potentially at a cost to patient care—or pull an existing worker away from whatever they’re doing (e.g., nursing) and put them in charge of compliance.
If this sounds not very smart, you’ll be shocked to know it gets worse. The Minnesota Department of Health actually wants providers to report more data than was even required by the law.
But that’s not all: Just recently, Minnesota state Rep. Tina Liebling (D) introduced H.B.4755, a bill that enshrines in law a requirement to report even more data, including aggregated payments for “all other expenses related to administering the 340B program.” So, first, providers get whacked with a new bureaucratic requirement that will stretch them thinner, either from a budgetary or staffing perspective; then, MDH under Gov. Walz whacks them harder with more bureaucracy requirements; now, Liebling wants to whack them with extra bureaucracy that amounts to undertaking bureaucracy to report on the extent of the bureaucracy.
If this is starting to sound like a Monty Python sketch to you, you are not alone. But for as much as it is pure comedy gold that Democrats want to impose more bureaucracy to get a read on the state of bureaucracy that they imposed because they wanted more bureaucracy in the first place, remember that if you live in rural Minnesota and you ever visit a rural hospital, this could end up having an effect on your health care.
Also worth noting: While Minnesota has been going down this road, red states like Louisiana, Arkansas and Mississippi have been moving to protect the 340B program with their own state laws. Joe Cunningham at RedState has been documenting this on and off for awhile now.
If there’s a DFL voter left outside 494 and 694, I’d love to know why.