Faced with a divided Congress unlikely to pass major legislation, President Joe Biden’s administration is now seeking or partnering with private companies to implement an unenforceable policy agenda on everything from prescription drug costs to expanding child care options.
On Wednesday, Biden celebrated pharmaceutical giant Eli Lilly’s announcement that it would reduce and lower the cost of insulin. Earlier this week, the Commerce Department announced it would require chipmakers to offer affordable child care plans in order to qualify for more than $50 billion in subsidies. And three major airlines responded to Biden’s call in the State of the Union to waive fees for parents and children to sit together by doing just that.
All three announcements advance the administration’s long-standing policy goal – to lower the cost of prescription drugs, to expand affordable child care options and to eliminate the so-called “junk fees” – in a way that Congress has so far not been able to. It shows how the administration is turning public pressures and regulations to implement its agenda.
“The president’s bully pulpit is a very important tool used to reduce family costs in many ways,” Bharat Ramamurti, deputy director of the White House National Economic Council, told HuffPost in a phone interview. “It’s not intended to be a substitute for getting things through Congress, or to do anything in rulemaking.”
Key to the effort is the popularity of the idea: Reducing the cost of prescription drugs has long been one of the public’s biggest priorities, and public surveys show Biden’s push against wasteful spending is generally popular.
“We pick this problem where there is something fundamentally unfair and unreasonable that is happening, and you shine the spotlight of the president on it,” Ramamurti continued. “The president has certainly been talking about lowering the price of insulin 100 times over the last year and a half because he’s been pushing to do this, and this week you’re seeing the pharmaceutical companies respond to the call to action.”
The tactic is not new to the White House. Shortly after Biden unveiled his antitrust agenda with an executive order in 2021 including a push to “right to repair“Apple announced it will sell repair kits to the public for the first time.
At the same time, these moves – all incremental – also show how limited the White House’s toolkit is to deal with major issues that are costing America.
Drug Price
The Inflation Reduction Act took a big step in addressing high drug prices, a major concern for the American public. This gives Medicare the ability to use purchasing power to negotiate lower prices for drugs for the first time, although Democrats friendly to the pharmaceutical industry make sure to limit their powers.
It also covers out-of-pocket insulin costs for people on Medicare at $35. (Attempts to apply these caps to private health insurance plans fail because of the rules of the Senate despite getting 57 votes.) Since a speech, Biden, other Democrats and even some Republicans have pushed for companies to voluntarily comply with the cap.
On Wednesday, Eli Lilly became the first of the three major insulin makers to agree, cover out-of-pocket costs at $35 a month. Market forces, including the development of biosimilars and efforts to produce cheaper insulin, play a role. But at least some of the credit also comes under political pressure.
“It’s very rare that we see drug companies voluntarily reduce prices,” said Juliette Cubanski, deputy program director on Medicare policy at the Kaiser Family Foundation. “The company is facing intense political pressure from lawmakers.”
Speaking to House Democrats at their annual conference in Baltimore, Biden predicted other major manufacturers – Danish pharmaceutical giant Novo Nordisk and France-based Sanofi – would have no choice but to follow suit.
“Guess what that means?” Biden said. “Every other company that makes insulin has to drop the price to $35 because they can’t compete.”
The decision will make a big difference for the uninsured, as most consumers with insurance will pay less than $35 a month, Cubanski said. He also pointed out that the latest insulin products produced by Eli Lilly will not be covered by the price cuts.
“This is an ongoing concern about drug prices in the United States where the Inflation Reduction Act is not being implemented,” he said.
Waste Costs
Biden’s push against so-called “junk fees” — fees added to tickets, financial services and other products — has caused no shortage of industry opposition. Since launching shortly before last month’s State of the Union address, the U.S. Chamber of Commerce and other groups have slammed the price, and major players in the hotel and ticketing industries have also pulled back.
However, the airline industry’s special call for fees has prompted three major US airlines – Frontier, United and American – to waive fees for children and parents sitting together. Administration officials hope to soon launch a Department of Transportation dashboard that tracks those costs will encourage other airlines to follow suit.
“Baggage fees are bad enough — not only can you treat your child like a suitcase,” Biden said at the State of the Union.
It helps that the Department of Transportation is already working on rules that would require the removal of these fees, although the proposal could be years from taking effect. Now, the White House is trying to work with Rep. Ann Wagner (R-Mo.) — who has sponsored legislation that would ban fees for families to sit together — is pushing for the requirement to become law.
Caring for Children
The government’s push to expand child care is different from other recent successes. While Biden and other officials verbally confronted airlines and pharmaceutical companies, Commerce Secretary Gina Raimondo emphasized the requirement for chip makers to offer child care as an example of the administration working with industry.
“Currently we don’t have affordable childcare, which is the most important factor that keeps people, especially women, out of the workforce,” Raimondo said. said on a conference call last week. “And we have to see how these companies are going to meet their workforce needs.”
Senate Republicans, who typically support the CHIPS Act, which provides funding for semiconductors, are grumbling about the move. Sen. Mitt Romney (R-Utah) called the requirement “wake up” and Sen. Thom Tillis (RN.C.) calls it “social engineering.”
Administration officials, however, disputed the terms needed to build the workforce needed by semiconductor manufacturers. Two innovation scholars at the Center for Strategic and International Studies, a centrist think tank, make similar arguments in a post a blog last week.
“It is not, as some have mistakenly argued, a matter of social policy,” the scholars wrote. “This is a pragmatic step, clearly in line with the interests of national security, to increase the workforce needed to make fabs and produce chips in our country.”
Child care, however, remains a national crisis Biden could not complete it completely, mainly because of the opposition of Sen. Joe Manchin (DW. Va.) and Kyrsten Sinema (D-Ariz.) on their original plan “Build Back Better”, which would make billions for the two children. care and prekindergarten programs.