Democrats Reach Drug Pricing Deal Key to Vote on Biden Plan
(Bloomberg) -- Democrats struck a deal to add provisions aimed at lowering the price of some prescription drugs to President Joe Biden’s $1.75 trillion tax and spending bill, clearing a major hurdle to finishing the legislation and staging a House vote as soon as this week.
“Today we’ve taken a massive step forward,” Senate Majority Leader Chuck Schumer said in announcing the agreement.
The landmark deal would empower Medicare, the government insurance plan for those 65 and older, to negotiate with drugmakers on prices for the first time. But to win over party holdouts, the price cuts apply to a narrower set of drugs than House Democrats originally proposed.
Under the plan, the 10 drugs that cost Medicare the most each year would be subject to negotiations, starting in 2023, including those used to treat cancer and rheumatoid arthritis and anti-coagulant medicines, Senate Finance Chairman Ron Wyden said. That number would ramp up to 30 in subsequent years. Only drugs outside their initial exclusivity period would be subject to negotiation, Wyden said.
Schumer said the price of insulin will go from $600 per month to $35 under the deal, which also would put a $2,000 annual cap on Medicare drug costs.
“By empowering Medicare to directly negotiate prices in Part B and Part D, this deal will directly reduce out-of-pocket drug spending for millions of patients every time they visit the pharmacy or doctor,” Schumer said.
Wyden, who estimated the proposal would save hundreds of billions of dollars, said it would also require drugmakers to rebate the government for profits made from increasing the price of their products starting in 2021. This would apply to price hikes on Medicare and on employer-sponsored plans.
The main lobbying group for the pharmaceutical industry ripped the plan, saying it would stifle innovation and hurt patients.
“Under the guise of ‘negotiation,’ it gives the government the power to dictate how much a medicine is worth and leaves many patients facing a future with less access to medicines and fewer new treatments,” PhRMA President and Chief Executive Stephen Ubl said in a statement.
Two Democrats who opposed an earlier, more expansive proposal, Arizona Senator Kyrsten Sinema and California Representative Scott Peters, said they supported the plan.
Sinema said in a statement that House Speaker Nancy Pelosi sought her out over the weekend to continue talks on getting the drug pricing provision nailed down. She called the resulting deal a “historic, transformative Medicare drug negotiation plan that will reduce out-of-pocket costs for seniors.”
Pelosi said Democrats were “very happy” about the agreement.
Pelosi and House Energy and Commerce Chair Frank Pallone have been leading regular talks since last week with Sinema, Peters and other lawmakers opposed to the original plan, according to two people familiar with the talks. The negotiations came about after Biden left drug price cuts out of the revised outline that he presented to congressional Democrats on Thursday.
There still are several other issues being negotiated so that Democrats can put together a complete bill to enact the major portions of Biden’s economic agenda. Those include provisions on immigration and the limit on the deduction for individuals for state and local taxes. Pelosi is pushing to have legislation ready for a House vote by the end of the week.
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