Senate Democrats are making a high-stakes final push to get legislation to lower prescription drug prices over the goal line.
While much of President Biden’s original economic package, from climate measures to higher taxes on the rich, has been stripped out by Sen. Joe Manchin (D-W.Va.), the party is trying to salvage a major measure to lower the cost of prescription drugs that Manchin said he would back.
The bill, which could get a Senate vote in the next two weeks, would allow Medicare to negotiate lower prices for some prescription drugs for the first time, a goal Democrats have been pushing for years.
It appears that Democrats have the votes to pass the measure without any GOP support, but a range of obstacles loom in the final stretch. Republicans and the powerful pharmaceutical industry are fiercely opposed to the measure. With a razor thin margin in a 50-50 Senate, the absence of any Democratic senators due to COVID-19 or other reasons could throw off the party’s plans.
Still, the possibility of passing Medicare drug price negotiation is giving Democrats something to point to after much of their sweeping agenda has fallen overboard.
“Let me say this: We are excited about doing prescription drugs,” Senate Majority Leader Charles Schumer (D-N.Y.) said Tuesday. “This is something we’ve waited for for a very long time and is going to be a major, major accomplishment to help people, bring down inflation.”
The issue polls extremely well with voters, which could give Democrats a much-needed jolt ahead of the midterms, amid Biden’s lagging approval ratings and concerns about inflation.
A Kaiser Family Foundation poll in October found that 83 percent of the public supports allowing Medicare to negotiate lower drug prices, including 71 percent of Republicans.
The core of the bill would allow Medicare to negotiate lower prices for 10 drugs per year starting in 2026 and 20 starting in 2029.
The measure is significantly scaled back from earlier drug pricing proposals, though, after Democratic leaders struck a deal with a group of moderate Democrats including Sen. Kyrsten Sinema (D-Ariz.) and Rep. Scott Peters (D-Calif.).
Under that deal, Medicare negotiation can only apply after a drug has been on the market for a certain period of time: nine years for many drugs and 13 years for complex “biologic” drugs.
The bill would impose a steep tax of up to 95 percent on drug companies that refused to come to the table and would also impose a ceiling that the negotiated price could not rise above, features that critics have used to argue that the bill is really just “price controls” rather than “negotiation.”
Other provisions would prevent drug companies from raising prices faster than the rate of inflation beginning this year and cap out of pocket drug costs for seniors on Medicare at $2,000 per year starting in 2025.
Asked if there is a political risk in opposing provisions to lower drug prices, Senate Minority Leader Mitch McConnell (R-Ky.), said Tuesday: “Well, I think everybody can make the decision for themselves,” but outlined his opposition to the measure, warning it would lead to less innovation and fewer new cures.
“My own view is socialist price controls are not the way to get a healthy pharmaceutical industry,” he said. “They produced a modern medical miracle with three highly effective vaccines in less than one year. This is a remarkable American success story, our pharmaceutical industry.”
In addition to the drug pricing provisions, the bill would also extend increased financial assistance to help people afford their health insurance premiums under the Affordable Care Act.
The extension of the extra help is likely to be for two years, though sources say there is some discussion of increasing it to three years. Adding the extra year would avoid setting up a cliff right before the 2024 presidential election. Without any action, the enhanced subsidies would expire at the end of this year.
The Congressional Budget Office (CBO) finds the drug pricing provisions would save about $288 billion over 10 years, while extending the increased ACA subsidies for two years would cost about $40 billion.
There would be a modest reduction in new drugs being developed due to the legislation, the CBO projected: 15 fewer drugs out of 1,300 expected to be approved over the next 30 years.
Further changes to the legislation could come if the Senate parliamentarian blows holes in any aspects of the drug pricing measure during a review to see if it complies with the chamber’s complex rules for reconciliation bills, which allow Democrats to bypass a GOP filibuster.
David Mitchell, founder of the advocacy group Patients for Affordable Drugs Now, said the bill is “historic without question,” despite the trims and negotiations needed to pass it.
“Is it everything that we would hope for if we could write the legislation ourselves? No, but that’s not the way things work here,” he said. “When you’re trying to alter policy that involves as many well-heeled and powerful players as this does, it takes time. We’re going to achieve breakthroughs this year that can be built upon for years to come.”