Rx: Discernment on Lauren Underwood’s Five Point Plan to Reduce Drug Prices

Lauren Underwood

Make No Mistake, Underwood’s Five Point Plan Nothing More Than Back Door Socialism by Empowering Government, Not Patients

On October 18, Congresswoman Lauren Underwood unveiled her “Five Point Plan” (5PP) for reducing prescription drug prices.

With typical Underwood fashion, she declared in her press release:

“Each concept in Underwood’s proposal has bipartisan support.”

Lauren Underwood press release 10/18/19 emphasis added

As pointed out many times here on McHenry County Blog, Underwood plays fast & loose with the term “bipartisan”.

Her 5PP is no exception.

Everybody supports the goal of lower prescription drug prices, and anyone denying there is a problem is being intentionally naive.

President Trump has been very clear his genuine desire to see American prescription drug prices lowered.

But where Underwood’s statement goes astray is actually looking at her plan, where she lays out concepts, but slips in socialist approaches and socialist legislation in her 5PP.

To be very clear, anything to do with prescription drug pricing is complex, and the Republican candidates for the 14th district need to have a very firm grasp on this issue, because Underwood’s 5PP is her policy/position statement for her 2020 reelection campaign.

During the upcoming primary campaign, to measure a candidate’s ability to defeat Underwood next year, the candidate must be far beyond talking points, abstracts, bromides and platitudes.

Underwood has already published hers, and has done a big media rollout including an op-ed in the Chicago Tribune earlier this month.

And in the month since Underwood published her plan, no Republican candidate in the 14th district race has spoken out against it or offered their own plan to take to the voters.

The problems with high prescription drug prices requires a real bipartisan, holistic solution, not a leftist socialist solution.

So what is a bipartisan approach to solving the problem of expensive prescription drug prices?

Three and a half months prior to Underwood’s 5PP release, the House Problem Solvers Caucus (PSC) released their own, genuinely bipartisan approach to begin to solve this problem facing our country.

The PSC is a 48-member House caucus equally divided between Democrats and Republicans where members put down their party labels, and attempt to solve problems, very much like in the business world.

The PSC was crucial in passing the emergency funding for the southern border crisis back in late June (H.R. 3401).

At the time the PSC convinced Speaker Pelosi and the majority House Democrats to support the Senate-amended H.R. 3401 as is, the PSC had a press conference to unveil the bipartisan approach, agreed to between Democrats and Republicans alike, on how to resolve the high prices of prescription drugs.

Their seven points are:

  • Access to medications for patients through more transparency, competition, and affordability in the U.S. prescription drug market.
  • Price transparency standards that give patients, health care providers, and the federal government clear information about drug costs.
  • Drug manufacturers should have to disclose, in a way consumers and providers can understand, the price of treatment for advertised drugs and explanation of prices.
  • Pharmacy benefit managers should have to disclose, in a way consumers and providers can understand, the discounts they receive from drug manufacturers that impact the cost of medications for patients.
  • Patent transparency standards that help new drugs come to market as soon as possible.
  • Competition among drug manufacturers that ensures continued R&D, makes drugs more affordable, and increases access for patients who need them. 
  • Enforcement mechanisms that pave the way for new, more affordable drugs if other manufacturers do not comply with transparency standards or engage in anti-competitive behavior.

Pretty straight forward, relying on free market, but with necessary enforcement if companies do not voluntary comply to be competitive.

This brief video was the introduction of the PSC’s points, with Congressman David Joyce (R, OH) speaking:

So now, Underwood’s 5PP, per her news release, with comments in italics:

  • Reduce out-of-pocket costs for prescription drugs – (H.R. 3, H.R. 4457) H.R. 4457 is Underwood’s legislation to eliminate out-of-pocket costs for medications for some chronic conditions. Underwood does not tell you the elimination of the co-pays will raise insurance premiums for the rest of us. The $2,000 cap in H.R. 3, again, is an artificial cap, which patients will have to pay with higher private insurance premiums through Medicare Part D.
  • Negotiate lower drug prices for all Americans – (HR. 3) While President Trump called for negotiated prices, he abandoned that position around the time negotiations between the Speaker broke down in September. The President no longer supports negotiated pricing. The fallacy of negotiated pricing and its impact on Americans is discussed in a video at the end of this article. Underwood attempts to demonize the pharmaceutical companies with incendiary talk like “price gouging”. She completely leaves out the impacts of suppliers, and the “middlemen” including pharmacy benefits managers (PBM). The President currently favors the Senate plan in S. 2543 opposed to H.R. 3.
  • Eliminate outrageous price hikes – (H.R. 4663, H.R. 2296) H.R. 4663 is the Jan Schakowsky solution to punish drug manufacturers, while not addressing issues with suppliers and PBMs. Forcing Big Pharma to eat these costs will reduce the quality of research & development for new/better medications. H.R. 2296, known as the METRIC act, contains common sense reporting principles and is the basis for good legislation.
  • Ensure generics remain affordable options – (H.R. 965, H.R. 1499) H.R. 965 can easily be the Lawyers’ Recovery Act of 2019, since it promotes litigation threats since generics come to market when a brand name drug patent expires. If patents reform is desired, address it. H.R. 1499 is the closest to addressing possible issues with patents, but it favors government mandates.
  • Invest in research for tomorrow’s cures – (H.R. 2401) That is what the private sector is supposed to do, and this Underwood sponsored legislation wants to make significant transfer of pharmaceutical research & development to the government, deep left to socialism.

The key legislation is H.R. 3, and the video in this embedded tweet with Congressmen Dan Crenshaw (R, TX) and Greg Walden (R, OR) begins to explain the other flawed components of H.R. 3:

As Crenshaw and Walden release subsequent videos, we will bring them to readers.

To be clear, Crenshaw and Walden barely scratched the surface on the problems with H.R. 3.

UPDATE (11/22/19): Here’s Video #2


Rx: Discernment on Lauren Underwood’s Five Point Plan to Reduce Drug Prices — 20 Comments

  1. I’m guessing I’m the only person in the entire country, that’s noticed his Health Care costs have gone through the roof, since the Cult of Obama decided to “fix it”.

  2. “President Trump has been very clear his genuine desire to see American prescription drug prices lowered.”

    And yet no plan, no proposal, no ideas. It’s not Underwood’s fault the Republicans don’t care.

  3. And DJ- got news for you! Health care codts have been going through the roof for decades before anyone heard of obama!

  4. Now do the pros and cons of the Republican alternatives on healthcare reform.

  5. Mr. Kviedera, read the article link on the 2nd point of Underwood’s plan “The President no longer supports negotiated pricing”.

    The President supports the Senate Bill 2543 over H.R. 3

  6. Joe, those proposals are sitting on Pelosi’s desk.

    She is tooo busy to do her job.

    There are several sitting on her desk.

    Get a grip!!

  7. Correcting, the issue is not healthcare reform, but only a small component, which is Rx drug prices. Probably too complex to try to cover in a single article, but presenting the 7-point approach from the Problem Solvers Caucus was used to baseline what ANY proposal, Underwood’s, House, Senate or the President, should try to reach for real bipartisanship.

    Something the Problem Solvers were clear, is the PBMs and others need to be held accountable, while the Democrats takes it all out on Big Pharma. We’ve seen the demonizing of Big Pharma in the past, and not only from Democrats.

    But the President came to his senses, and determined the “negotiating” of drug prices the way it’s spelled out in H.R. 3 is not the way to go, and Crenshaw & Walden touched upon it briefly. Part 2 will complete that picture in their video series.

    And something they barely touched upon in Part 1, was how the Chinese want to take over being the pharmaceutical R&D. At some point, the issue of “counterfeit” drugs is going to come up.

    But Innovation is one of the founding principles of our country, to have the freedom to innovate with reasonable restrictions, and that is what patent laws is to protect. If something needs to be corrected, correct it.

    But surrendering too much to the government? That’s what socialism is about.

    One other thing, using foreign countries’ artificially low Rx prices, who don’t have to respect U.S. patent laws if they don’t get what they want, will exacerbate issues in our country, knowing intellectual property is no longer a safe and protected right.

    I’m sure Crenshaw and Walden will touch upon that, too.

  8. Low I.Q. Little Joey Blowhard never fails to embarrass himself and
    not even realize it, and he does it with a boundless gusto.
    He is a true and obedient subject of the DEMOCRAT party.

  9. I would recommend a book entitled An American Sickness to readers of this blog. It’s not a perfect book. The author seems to believe that “data” is the plural of “anecdote”. Nevertheless, the points are valid, as I know from being a financial analyst for 40+ years, following hospitals, insurance companies, and the pharmaceutical industry.

    Hospitals have become monopoly behemoths. They are far larger than is warranted by any economies of scale. Rather, they simply become monopoly price setters and sell services that aren’t needed at inflated prices. (The author of An American Sickness rightly complains about their tax-exempt status, but making hospitals pay taxes wouldn’t cut costs.)

    The drug industry has learned to play the patent laws, stifling generic competition. These laws need to be reformed.

    The FDA needs to be detailed with the task of performing efficacy studies so that patients have independent information about how different drugs perform. (Drugs now are patented based on safety and drug companies aren’t required to compare their new drugs with existing treatments, only with placebos.)

    Medicare, as the largest single payer, needs to negotiate drug prices and to demand that hospitals provide detailed costs for each service and pay based on best practices.

    Do we need a single payer system because massive numbers of people are uninsured? No, we don’t. About 90% of all Americans are covered by health insurance, the largest cohort of the uninsured being young adults who irresponsibly choose not to buy insurance. About 95% of all children are insured, and the remainder are almost all eligible for Medicaid. In short, scrapping a system where 90% are insured because of the remaining 10% is illogical.

    (Please, no stories about cases here and there where people really can’t afford insurance. Such cases exist and need to be addressed, but this doesn’t address the fact that these are a small minority of the population.)

    This doesn’t mean health insurance doesn’t need reform. First, when the Republicans say forcing people to buy health insurance is a violation of rights, they’re wrong. If you drive, you’re supposed to buy liability insurance. And the law of the land says that hospitals must treat all patients, regardless of the ability to pay. In short, we aren’t going to refuse medical care for those who are uninsured, and failing to buy insurance is simply irresponsible, because the cost will be borne by the public. Requiring people to buy health insurance is a protection of the public from having to unfairly bear the liability for other’s irresponsibility, just like car insurance.

    However, not everyone can afford insurance, both the premiums and the deductibles, and so we will be forced to subsidize some people. This isn’t an ideological conclusion, it’s simply a fact. We can subsidize insurance or we can pay higher taxes for the uninsured. The question is simply which to choose, based on cost and humanitarianism.

    It would make economic sense to provide subsidies for premiums and out-of-pocket expenses based on income. The guideline should be that everyone pays something, and everyone pays every time they go to the doctor or the emergency room, enough to make them think twice — but not three times!

    As insurance companies have a logical economic interest in adverse selection (avoiding the sick) and as we as a society inevitably bear the costs, one solution for the “uninsurable”, those with pre-existing conditions, might be to create a quasi-governmental insurer for the “uninsurable”, with the board composed of government officials and representatives of the insurance industry, with the shortfall in revenues coming from health insurers in proportion to their size. This is not dissimilar to how airports are financed or how FINRA is run. It provides the right incentives in that the insurance companies want to see costs as low as possible, and the public representatives’ jobs would be to ensure that adequate care is provided.

    Finally, it is a small minority of patients who consume most of our healthcare, the very elderly and those with chronic conditions. Too many of the elderly are kept (barely) alive, trapped in hospital beds and stuck with tubes, when they’d prefer to die at home. If doctors would discuss end-of-life options with patients long before the need arose, then these costs would be much smaller, and all patients would get the end-of-life care that they actually want. Too many now reach a stage where they can no longer make decisions and so decisions are made for them.

    The chronic patients are more difficult. To the extent that chronic cases are a result of life style choices (smoking, drinking, obesity), patients should pay more and be offered assistance in making changes. There is strong evidence that the right incentives can nudge enough people in the right direction to make substantial changes.

    Chronic cases that are not the result of lifestyle choices are obviously the most saddening, those who, through no fault of their own, face a lifetime of pain and limitation. Here all we can hope for is better medicine as a result of innovation and discovery.

    My recommendations are not final and definitive. Others may have better ideas, and experience has the potential to lead to improvements.

    Finally, I am speaking to what “ought to be”. In the real world, those who have a strong vested interest in the current system (drug companies, hospitals and health insurers) are better organized and funded than those of us who bear the diffuse costs.

  10. Mr. Wilson, thank you for your detail.

    As an aside, I lament what you wrote is not coming from the Republican candidates in the 14th district, but hopefully, they will be forthcoming.

    When you favor “negotiating” drug prices, as spelled out in H.R. 3 using six specific foreign countries to determine pricing, is that a free market approach?

    I genuinely believe it is not because the free market didn’t determine the pricing of meds in other countries, socialistic price controls did.

    Remember, foreign governments do not have to obey U.S. patent laws, except through treaty.

    As far as the premiums and out-of-pocket expenses, does anyone remember what killed health care reform back in the 90s?

    One of the components was “community rating”, where younger healthy people must pay for the health of others, particularly for the preventable health issues like smoking and obesity contribute.

    That was Gen Xers who were the “young” at the time, where now it’s Millennials and Gen Z.

    That’s why H.R. 4457 will not work, because it’s another way to implement community rating and co-pays have a reason why the users of certain meds should contribute something for the cost of their care.

    Reform it, yes, but eliminating it sounds too much like “free tuition” for college degrees.

    Would I be amenable to a tuition break, possibly eliminating for community colleges?


    But subsidizing someone to have the “college experience” of a 4-year program at a state university is not practicable nor desirable.

    Let’s continue the discussion in this online town hall, and maybe the Republican congressional candidates will get some inputs to form their own positions and publish something well before the primary.

  11. I love how any government intervention is called the scary SOCIALISM!!!!

    I also love how “bipartisan” continues to be defined in such an absurd way.

  12. Third party payment in healthcare can be defined as:

    Required monthly purchase of a financial OPTION contract which “promises” to ‘deliver’ (some portion of) undefined goods and services at non-disclosed prices, to be supplied by non-obligated second-party vendors at some future date.

    Third party payment separating buyer (patient) from seller (doc&nurse) is indeed scary.
    In the past 2 decades, both parties to the medical transaction have been separated by third party payment, and the 2 integral parties to the transaction have suffered for the enrichment of the third party gatekeepers.


  13. As problematic as our healthcare is I get on my knees and thank God Almighty we don’t have a socialized healthcare system like in the UK and Ireland.

    It all sounds great until you see the reality of it.

  14. But we do have a socialized healthcare system.

    Medicare reimbursement rates fix prices which (mandatory financial contracts known as ‘health insurance’) for-profit third party payers have adopted as pricelists for payment to actual providers.

    GPOs are granted exemption from anti kickback laws, which stifles competition, inflating prices and causing murderous shortages of vaccines, chemotherapy drugs, and supplies like normal saline bags.

    This complicated-by-design system does great financial harm to all patients, keeps docs and nurses from best practices, as well as ensuring that most docs and nurses are compensated at lower hourly rates than CPS Administrators and teachers.

    It is a medical system designed and run by politicians, perhaps at their masters’ command, but certainly not driven by evidence-based medical best practices. Profits are determined by politicians and directed toward specific politically chosen recipients.

    Worker bees (docs and nurses) in that industry are tightly controlled through politally derived regulations and policy decisions which ensure no alternative competitive practices are possible.

    Isnt that socialized medicine?

  15. We have a seriously messed up over regulated hodgepodge of a healthcare system, but I wouldn’t call it socialized medicine.

    I’d say it’s closer to crony capitalism.

    Physicians in socialized systems don’t make anywhere near the kind of money that they make here.

  16. A January 2018 article per the following describes the government health care system in Great Britain per below. If we in the U.S. want to degrade to something similar, vote for one of the ignorant or reckless Democrat candidates (Cherokee Liz, Crazy Bernie, etc) proposing Medicare for all and/or government takeover of our health care system.


    “LONDON — At some emergency wards, patients wait more than 12 hours before they are tended to. Corridors are jammed with beds carrying frail and elderly patients waiting to be admitted to hospital wards. Outpatient appointments were canceled to free up staff members, and by Wednesday morning hospitals had been ordered to postpone nonurgent surgeries until the end of the month.”

  17. Physicians in those countries also do not work the hours as docs here, nor do they suffer the expense and risk of malpractice liability as docs here.

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