Pelosi Leading Talks to Add Drug Price Cuts in Biden Plan
(Bloomberg) -- House Speaker Nancy Pelosi is leading an effort to add a plan to cut prescription drug prices to President Joe Biden’s $1.75 trillion economic plan, and lawmakers are optimistic a deal can be reached within days.
Biden left mention of cutting drug prices out of the outline he presented to Congress on Thursday, but even opponents of the original House provision said they would be open to a more limited version. Arizona Senator Kyrsten Sinema had agreed to at least some version of drug price cuts in a deal with the White House, according to a person familiar with her views.
To win over the handful of House and Senate Democrats who were holding out support, Democrats will have to drop or modify a proposed 95% excise tax on drug companies that was to be used to force them to lower prices for younger patients not part of Medicare, according to Vermont Democratic Representative Peter Welch.
Welch said Pelosi is “intimately” involved in the talks and they are working with drug price provision holdout Representative Scott Peters of California. He said Peters is on track to prevail in his quest to have the 95% tax penalty changed.
“We have to change that,” Welch said on a conference call with reporters. “It was a dealbreaker for Scott and a couple of my other colleagues, but there are other ways you can do it.”
Peters in a Friday interview said that he was “very optimistic” a deal can be reached in the coming days.
Peters said he is still fighting against the excise tax penalty because he said it would stifle innovation for life-saving drugs, but that he favors reducing ability of drug companies to extend patent exclusivity indefinitely.
“To clarify, the excise tax is still part of these discussions,” Welch said later in an emailed statement. “In these ongoing conversations some of my colleagues have expressed concern about this enforcement mechanism, but all of us agree that we need to ensure the pharmaceutical companies come to the table for real negotiation in order to lower costs for consumers.”
Read More: Fault Lines Emerge Among Democrats on Drug Price Negotiations
Pelosi “continues to push for this important priority of House Democrats,” a spokesman, Henry Connelly, said on Friday, referring to lowering drug prices.
The original House proposal would have imposed a 95% excise tax on drug firms that failed to extend the lower prices negotiated with Medicare to private insurers. Democrats have debated replacing that with either a lower tax or an alternative that wouldn’t cut as deeply into drug-makers’ profits, according to a person familiar with the discussions. Other options include excluding drug-makers who refuse to negotiate from federal programs like Medicare, or a binding arbitration process, the person said. But no agreement has been struck.
Welch said lawmakers are homing in on a deal that would provide rebates for seniors who see prices for certain drugs rise faster than the inflation rate.
The emerging plan could allow Medicare to negotiate drug prices for the first time, and talks continue on what categories of drugs will be subject to the cost-cutting negotiation power. Welch said the plan centers around drugs no longer under patent protection rather than drug company exclusive products, but is tied to patent reforms meant to stop repeat extensions.
Welch said also under consideration is excluding the smallest bio-tech firms from negotiation or offering other protections to them to foster innovation. Peters said he is not opposed to the idea.
Welch told reporters that given the needs, lawmakers are outraged at the prospect of drug prices not making it into the budget bill.
“A lot of my colleagues are saying ‘Really, that’s political malpractice’,” he said.
Peters said that once both sides firmly agree to protect patent exclusive drugs, then the talks will be on the exact levels of inflation rebates and other parameters in the bill.
“There don’t see any real reason that we should exclude common sense prescription drug measures from this bill,” he said.
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