Sniping Already Starting Over Baltimore Bridge Reconstruction Costs

Plus: Ozempic costs face scrutiny as Medicare spending soars ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Michael Rainey and Yuval Rosenberg Happy Opening Day to those who celebrate! Here’s what we’re watching before turning our attention to the diamond. We’ll be back in your inbox on Monday, so here’s wishing a happy Easter to those who celebrate, too. (Abaca Press) The Sniping Is Already Starting Over Baltimore Bridge Rebuilding Costs Although there’s no firm estimate yet on the cost of rebuilding the collapsed Francis Scott Key Bridge in Baltimore, some details are beginning to trickle in, along with hints of the political battles that could lie ahead as lawmakers determine how to pay for the disaster. Federal officials said Tuesday that the rebuilding effort could cost upwards of $2 billion, Roll Call [reports]( although it’s not clear how much of that sum would go toward a new bridge and how much would go toward cleanup. A spokesperson for the Insurance Information Institute [told CNN]( that a new bridge alone could cost more than $1.2 billion. Maryland Sen. Chris Van Hollen said Thursday that 90% of the construction costs will be covered by the Federal Highway Administration’s emergency fund, a level of coverage reflecting preestablished rules for interstate highways damaged in disasters. (You can read more about those rules in this [report]( from the Congressional Research Service). As Transportation Secretary Pete Buttigieg noted on Wednesday, the emergency fund currently has about $950 million in it. Though some of that money may already be attached to other projects, the fund typically receives an additional $100 million or more from Congress each year. Van Hollen said he would work with fellow Democratic Sen. Ben Cardin to ensure that the federal government picks up the other 10% of the cost. That will likely require additional legislation from Congress, and Van Hollen said he planned to call House Speaker Mike Johnson to discuss the matter. "My message will be: We’re all Americans. We should all be in this together to help a city in need," he said. "This is an emergency situation and we’ve always addressed emergencies through supplementals." In the meantime, Maryland officials on Thursday requested $60 million from the federal government to cover immediate costs associated with recovery and salvage at the disaster site. The Federal Highway Administration covers 100% of the costs of emergency repairs to highways and bridges within the first 270 days of a disaster. Funding questions on the right: The idea of using federal funds to cover the full cost of rebuilding is meeting resistance among some conservatives. Rep. Dan Meuser, a Republican from Pennsylvania, expressed irritation that President Joe Biden was so quick to pledge the full support of the federal government in the recovery effort. "It was kind of outrageous immediately for Biden to express in this tragedy the idea that he’s going to use federal funds to pay for the entirety [of the rebuilding]," Meuser told Fox News’s Maria Bartiromo on Thursday. "First reaction, frankly the only reaction, tends to be to spend." Meuser said the U.S. should consider pursuing payments from Singapore, where the container ship MV Dali is registered, and from the ship’s insurer. "We just can’t take the easy route all the time and just try to spend the taxpayers’ money," Meuser said. (Treasury Secretary Janet Yellen said Wednesday that she expected insurance payments to cover some part of the costs.) Meuser also noted that Maryland received billions in transportation and infrastructure funding from the federal government via the 2021 infrastructure bill, and claimed that the state already has the money it needs for the bridge. Republican Rep. Chip Roy of Texas, a member of the far-right House Freedom Caucus, said that he is open to federal money being used in response to the disaster, but was concerned about where the funding will come from. "If we gotta go set aside X billion dollars to deal with that port issue, then we should pay for it," he told CNN. "Go find somebody who's paid for it. And so, well, I want to have those conversations." The bottom line: Funding issues aren’t expected to delay relief efforts in the immediate aftermath of the Baltimore disaster, but the long-term project of rebuilding the bridge could spark political battles over who ultimately foots the bill. Ozempic Costs Under Scrutiny as Medicare Spending Soars Some widely used diabetes and weight loss drugs could be profitably manufactured for far less than they currently cost, according to a new study. The analysis, published in [JAMA Network Open]( by researchers at Yale University, King’s College Hospital in London and the nonprofit Doctors Without Borders, finds that the blockbuster diabetes drug Ozempic, widely used for weight loss, can be manufactured at a cost ranging from 89 cents to $4.73 for a month’s supply. That includes a profit margin. The drug has a U.S. list price of about $936 for a month’s supply of injections, though that price does not factor in insurance, discounts or rebates. "The findings of this study suggest that robust generic and biosimilar competition could reduce prices to more affordable levels and enable expansion of diabetes treatment globally," the researchers conclude. Demand for Ozempic and related drugs in a class known as GLP-1s has surged, raising questions about their affordability and leading some insurers to stop covering them. Citing rising costs, North Carolina’s state health plan this year dropped coverage of the drugs for state employees who use the medications for weight loss, though not for those with diabetes. Sen. Bernie Sanders, the Vermont independent who chairs the Senate Health, Education, Labor and Pensions Committee, pointed to the new study in calling on Danish drugmaker Novo Nordisk to lower the price of Ozempic and a related drug, Wegovy. Sanders said that the company, which earned nearly $15 billion in profits in 2023, had done the right thing by lowering the U.S. price of its insulin products and should do the same for Ozempic. "Novo Nordisk charges Americans nearly $1,000 a month for this drug, while the same exact product can be purchased for just $155 a month in Canada and just $59 in Germany," he said in a statement Wednesday. "I am calling on Novo Nordisk to lower the list price of Ozempic – and the related drug Wegovy – in America to no more than what they charge for this drug in Canada. The American people are sick and tired of paying, by far, the highest prices in the world for prescription drugs while the pharmaceutical industry enjoys huge profits." Sanders said that, while Ozempic can be a "game changer" in the fight against diabetes and obesity, millions of people who need the drug won’t be able to afford it at current prices — and, he warned, "this outrageously high price has the potential to bankrupt Medicare, the American people and our entire health care system." Sanders is looking to discuss pricing with Novo Nordisk CEO Lars Fruergaard Jørgensen. The drugmaker reportedly responded by noting that it spent nearly $5 billion on research and development last year, and will spend more than $6 billion to increase production of the GLP-1s to meet surging demand. It also said, per [CNBC]( that three-quarters of its gross earnings go to rebates and discounts to expand patient access to its products. CNBC’s Annika Kim Constantino also points to a [survey]( released this month by Evercore ISI that found that more than half of people currently taking a GLP-1 said they pay $50 or less per month. Concerns about Medicare costs: The JAMA study comes just days after a separate analysis found that Medicare spending on Ozempic and other GLP-1s is skyrocketing. The [analysis by KFF]( a nonpartisan health policy research organization, of newly released government data showed that Medicare spending on weight loss drugs like Ozempic soared from $57 million in 2018 to $5.7 billion last year. KFF notes that Medicare could select Ozempic and related drugs for price negotiations as early as next year, with negotiated prices potentially taking effect starting in 2027. But Medicare spending on these drugs could also be heading significantly higher now that some Medicare plans have [started covering Wegovy]( for heart disease patients and GLP-1s get cleared for other uses over time. "These drugs offer substantial potential health benefits," the KFF report says, "but the combination of intense demand, new uses, and high prices for these treatments is likely to place tremendous pressure on Medicare spending, Part D plan costs, and premiums for Part D coverage." Number of the Day: $71 Million The $1.2 trillion spending package approved by Congress last week includes more than $71 million in earmarks for lawmakers who voted against the bill, according to an analysis by [Punchbowl News]( which notes that "it was once unheard of for a member or senator to get an earmark in a bill and then vote against the legislation" but that the practice has now become "relatively commonplace." Among those who did so this time were Democratic Sen. Michael Bennet of Colorado, Independent Sen. Bernie Sanders of Vermont and Republican Sen. Tommy Tuberville of Alabama. Some Republicans and Democrats in the House "voted no but took the dough" as well. "The main takeaway here is that earmarks aren’t the carrot they used to be," Punchbowl’s Jake Sherman, Andrew Desiderio and John Bresnahan write, noting that the offending lawmakers also aren’t getting punished by congressional leaders like they once might have been. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [Maryland Senator: Federal Government to Cover 90 Percent of Bridge Rebuild Costs]( – The Hill - [Officials: Baltimore Bridge Price Tag Could Be at Least $2 Billion]( – Roll Call - [Maryland Requests $60 Million for Baltimore Bridge Collapse Recovery]( – Axios - [First Medicare Health Plans to Start Paying for Weight-Loss Drug Wegovy]( – Wall Street Journal - [Bernie Sanders Wants to Meet Novo CEO Next Week on Ozempic Price]( – Bloomberg - [Novo Nordisk’s $1,000 Diabetes Drug Ozempic Can Be Made for Less Than $5 a Month, Study Suggests]( – CNBC - [Cole Considered Early Favorite to Win House Appropriations Gavel]( – Roll Call - [GOP Plans for Medicaid Cuts Could Face Backlash]( – Axios - [A Drug Half as Good as Ozempic for One-30th the Price]( – The Atlantic - [South Carolina to Use Congressional Map Deemed Unconstitutional]( – Washington Post - [Key Gauges of US Economy Advanced at Healthy Clip to End 2023]( – Bloomberg Views and Analysis - [The Heroism of Ukraine and the Nihilism of Mike Johnson]( – Amelia Glaser and Marci Shore, CNN - [Social Security Is Again in the Crosshairs of a GOP Budget, Even Though a Long-Term Fix Would Be Simple]( – Michael Hiltzik, Los Angeles Times - [Four Ways to Simplify the Income Tax]( – William Gale and Samuel Thorpe, The Hill - [I Work in Supply Chain Logistics. Here’s What I Advise After the Tragedy in Baltimore]( – Ryan Petersen, New York Times Copyright © 2024 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](