Is the Public Option Dead? Plus, Amendments That Might Actually Matter

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The Associated Press and New York Times are reporting tonight that the 10 senators tapped to negotiate an alternative to or compromise on the Senate health reform bill’s public option have dropped the idea of a government-run health insurance plan altogether. Senate Majority Leader Harry Reid told reporters that the group is sending proposals to the Congressional Budget Office to determine their fiscal impact. (The 10 senators – five centrists and five liberals – are reportedly considering an expansion of Medicare as part of their negotiations.)

But the public option is not Reid’s only headache. As I’ve already noted, many of the amendments being offered on the Senate health reform bill are meaningless because they either have no chance of passing or are so inconsequential that they have universal support from both sides of the aisle. An amendment introduced this evening by Democratic Sen. Byron Dorgan, on the other hand, could have big consequences.

Dorgan is one of the lawmakers who thinks Americans got a raw deal when the White House and Senate Finance Committee Chairman Max Baucus promised earlier this year to shield the drug industry from cuts beyond $80 billion over ten years drug makers agreed to up front. In exchange for this protection, the trade group representing pharmaceutical companies, PhRMA, has thrown its considerable weight behind Democratic health reform, spending millions on television ads supporting the effort.

Dorgan’s amendment, a plan he’s proposed before, would allow pharmacies and pharmaceutical wholesalers to import drugs from other countries – like Canada – where they are available more cheaply than in the U.S. The Congressional Budget Office estimates this amendment would save the federal government $19 billion over 10 years. But it could cost drug makers a lot more and passage of the Dorgan amendment would blow up the White House PhRMA deal.

On the Senate floor while explaining the purpose of his amendment, Dorgan said drug makers got a “sweetheart deal” and that he expects “tremendous pushback from the drug industry.” Dorgan also pointed out that Barack Obama and White House Chief of Staff Rahm Emanuel supported drug “re-importation” when they were in Congress. The pharmaceutical industry is a tough one to defend this week, as some in the House are currently investigating whether drug makers artificially inflated prices in 2009 in anticipation of health reform. Still, Dorgan’s plan could have been destined to obscurity if not for the bipartisan group of 19 other senators co-sponsoring his amendment: Senators Olympia Snowe (R-ME), John McCain (R-AZ), Chuck Grassley (R-IA), Debbie Stabenow (D-MI), Amy Klobuchar (D-MN), Sherrod Brown (D-OH), Jeanne Shaheen (D-NH), David Vitter (R-LA), Herb Kohl (D-WI), Patrick Leahy (D-VT), Russ Feingold (D-WI), Bill Nelson (D-FL), Bernie Sanders (I-VT), Al Franken (D-MN), Sheldon Whitehouse (D-RI), Barbara Boxer (D-CA), Jim Webb (D-VA), Jon Tester (D-MT) and Tim Johnson (D-SD). One glitch for Dorgan: the Food and Drug Administration says implementing his amendment to bring in drugs from outside the U.S. would be “logistically challenging” and could present “safety challenges.” Dorgan said the FDA’s concerns are “bogus.”

Democratic Sen. Bill Nelson also has an amendment that would destroy the White House PhRMA deal. His amendment would shift drug coverage for Americans who qualify for Medicaid and Medicare – known as “dual eligibles” – from Medicare to Medcaid. The government pays much more for drugs paid for via Medicare, so the shift would lower costs for the federal government and, according to Nelson, cost the drug industry “extra profits worth about $106 billion over 10 years.” Nelson introduced his amendment during the Senate Finance Committee markup earlier this year and it failed 10-13, but he intends to try to rally support for it again on the Senate floor.