‘Real sign of progress’: Dems nearing deal on drug pricing

By | November 2, 2021

Democrats on Capitol Hill are racing to hammer out the details of their drug pricing agreement by the end of Tuesday, and while the latest proposal is far weaker than the version passed twice by the House, even staunch progressives in both chambers are preparing to accept that it’s likely the best they’re able to get in the narrowly divided Congress.

An outline of the most recent policy, obtained by POLITICO, would empower the government to negotiate the cost of 30 drugs by 2028, and would carve out exceptions for small biotech companies. Only drugs that have been on the market for several years and have passed their initial exclusivity periods would be eligible for negotiation, according to the outline, which began circulating among lobbyists earlier this week. To the dismay of progressive lawmakers and outside advocates, the deal would also limit drug companies’ price hikes to the 2021 inflation rate, not the far lower 2016 rate they had initially supported.

Talks are ongoing and Sen. Kyrsten Sinema (D-Ariz), a persistent critic of drug-pricing reforms, has not yet endorsed the latest version. But several key Democrats said Tuesday they were confident a deal is within reach, allowing them to settle one of the thorniest outstanding issues in the nearly $2 trillion spending package Democrats are racing to pass.

A senior Democratic aide said Tuesday that the “broad contours” of the deal are “likely to stay.” If they do, it would mark the first time Medicare Part D is allowed to negotiate directly with pharmaceutical companies, a move industry has fought hard against for nearly two decades.

Senate Majority Whip Dick Durbin told POLITICO Tuesday that, given the pharmaceutical industry’s power and Democrats’ tight margins, members should view the watered-down drug pricing deal as a win.

“I would prefer a much stronger version, but I don’t want to end up empty handed,” he said. “I want more than this, but I’ll take it because it’s a step in the right direction — a modest beginning.”

Still, some Democrats worry the narrower policy will fail to deliver on the party’s campaign trail promises to meaningfully lower drug prices and fail to generate the hundreds of billions of dollars in federal savings needed to pay for other health priorities, such as expanding Medicaid and adding benefits to Medicare. In particular, progressives fear that waiting until 2028 to negotiate the prices of a handful of drugs will do little to make a dent for Americans struggling with soaring drug costs.

Senate Budget Chair Bernie Sanders told POLITICO on Tuesday the current version goes “nowhere near far enough.”

“The Veterans Administration spends half as much on prescription drugs as does Medicare, and that is totally absurd,” he said.

In the House, the Progressive Caucus, which last week was ready to back the overall social spending bill without any drug pricing reforms included, appears set to support the new language even as some Democrats are hoping they can still wrangle for more.

“The caucus wants either something that’s meaningful and that’s actually going to lead to a reduction in drug pricing or nothing at all,” Rep. Jimmy Gomez (D-Calif.) told reporters Tuesday morning.

Some members close to leadership, including Rep. Jan Schakowsky (D-Ill.), pointed to the success the pharmaceutical industry has had in bending the policy in its favor over the last few months with a ramped up effort of lobbying, advertising and campaign donations.

“They have a very powerful influence in this Congress,” she said.

But several leaders of the talks, including Durbin and Finance Chair Ron Wyden (D-Ore.), insist that the policy is a major improvement over the status quo, because Medicare currently can’t negotiate the cost of any drugs and seniors have no limit on the amount they have to spend out of pocket on their medications.

The Pharmaceutical Research and Manufacturers of America, a trade organization for the industry, did not immediately respond to a request for comment.

Wyden said Tuesday the bill will still have “some real wins for patients and consumers,” particularly a new $35 monthly cap for insulin, the application of inflation caps to the commercial market as well as Medicare, and negotiations over some of the most expensive drugs in Medicare Parts B and D, like those for cancer and arthritis.

“For the first time, the government will no longer have its hand tied behind its back,” Wyden said Tuesday. “That’s a real sign of progress.”

Even centrist lawmakers who had previously hesitated to endorse the policy told POLITICO they feel good about where the drug pricing deal is likely to land.

Sen. Tom Carper (D-Del.) said he’s pleased the negotiations would “not include the whole universe of drugs.”

“It’s similar to what we do with the VA, where there’s a formulary — not every drug under the sun,” he told reporters.

Menendez, stressing that he hails from a state with “300,000 jobs in the pharmaceutical industry…that create life-saving drugs,” disputed that the policy now under discussion is too deferential to Big Pharma.

“They’re not supportive of price negotiations, but it will have price negotiation, and we will get a big chunk of money out of them,” he said. “We want to make sure seniors at the drug counter get the greatest relief possible, not just that the government saves money. I think there are provisions in the latest version that will do that.”

Burgess Everett and Megan R. Wilson contributed to this report.