Democrats Strike Deal to Lower Prescription Drug Prices

COP26 in Glasgow
KEVIN LAMARQUE
By Yuval Rosenberg

Happy Election Day! As voters
in Virginia and elsewhere headed to the polls, Democrats said they
made progress Tuesday toward resolving some of the outstanding
differences that have slowed their Build Back Better plan — steps
that could bring them closer to a House vote as soon as this week
on both the $1.85 trillion package focused on the care economy and
climate change and a separate bipartisan infrastructure bill. And
President Joe Biden expressed optimism that Sen. Joe Manchin
(D-WV), who on Monday effectively slammed the brakes on efforts to
speed to a deal, would ultimately support the legislation.

Here’s what you need to know.

Biden Says Manchin ‘Will Be There’ on Build Back Better
Vote

President Biden on Tuesday told reporters that he believes
Manchin will ultimately back Democrats’ social spending and climate
change bill.

"I believe that Joe will be there," Biden said of the West
Virginia senator during a news conference to close the United
Nations climate summit in Glasgow, Scotland.

Manchin made clear Monday that he still has significant
misgivings about details of the package and the speed with which
his fellow Democrats are trying to enact it. He decried the use of
budgetary gimmicks to lower the official cost of the legislation
and expressed concern that the spending involved could spur
additional inflation. And he said he needed more time to understand
the likely economic and fiscal effects of the package.

On Tuesday, Manchin told reporters that he had never signed off
on the $1.85 trillion Build Back Better framework released by the
White House last week and that there’s no rush to finalize the
legislation at this point, again taking aim at progressives for
blocking a vote last week on the bipartisan infrastructure bill
that would have delivered Biden a win before he headed to
Europe.

“I just think it’s going to take quite a while,” Manchin said.
“We’re not in a rush right now.”

Other Democrats evidently feel differently. They are racing to
nail down a deal and potentially put it to a vote in the House as
soon as this week — before an official score of the legislation
from the Congressional Budget Office is ready. That score
reportedly could take about two weeks. Senate Majority Leader Chuck
Schumer (D-NY) said Tuesday he hopes his chamber can take up the
bill on November 15.

But a number of centrist House Democrats — Reps. Ed Case of
Hawaii, Jared Golden of Maine, Josh Gottheimer of New Jersey,
Stephanie Murphy of Florida and Kurt Schrader of Oregon — said in a
letter to House Speaker Nancy Pelosi that they
want 72 hours to review the package and a cost
estimate by the Joint Committee on Taxation and Congressional
Budget Office before any House vote. That could push any House
action on the package into next week at the earliest.

Whenever a Senate vote happens, Biden indicated Tuesday he
expects Manchin to back the legislation. The president said Manchin
is just looking to ensure that the details of the final legislative
text match up with what he has indicated he would support. "He will
vote for this if we have in this proposal what he has anticipated,
and that is looking at the fine print and the detail of what comes
out of the House in terms of the actual legislative initiatives,"
Biden said.

Democrats Strike Deal to Let Medicare Negotiate Drug
Prices

Senate Democrats on Tuesday announced they have reached an
agreement on a plan to lower the prices of some drugs covered by
Medicare. The proposal, part of Democrat’s $1.85 trillion spending
bill, would empower the federal government to negotiate prices
directly with drugmakers on a limited basis for the first time in
the history of Medicare, marking a historic shift that
pharmaceutical companies have resisted for decades.

“Today we’ve taken a massive step forward,” Senate Majority
Leader Chuck Schumer (D-NY) said as he announced the agreement.

The plan is far shy of what some Democrats had hoped for,
though, since it limits the government’s negotiating power to a
subset of drugs. Under the agreement, the full details of which
have not yet been released, the 10 drugs that cost Medicare the
most would be subject to price negotiations starting in 2023, with
the list of drugs growing to 30 over a period of years.

In a further limitation, the set of drugs that can be negotiated
will be limited to those that no longer have "exclusivity," or
protection from generic competition. The plan includes a $35 per
month cap on the cost of insulin for those in Medicare, as well as
a $2,000 per year cap on out-of-pocket expenses for drugs. And it
would penalize drugmakers that raise prices faster than inflation,
in both Medicare and commercial health insurance plans.

Larry Levitt of the Kaiser Family Foundation said the
scaled-back agreement is significant nonetheless. “The emerging
Democratic deal on drug costs is more modest across the board than
the original aspiration, but it still checks all the boxes,” Levitt
tweeted.

Senate Finance Chairman Ron Wyden (D-OR) said the plan would
save hundreds of billions of dollars and set an important precedent
that the government can negotiate the prices of drugs covered by
Medicare. “The prohibition on negotiation has almost been like a
curse,” Wyden said. “There was a sense the government had its hands
tied behind its back. And now a precedent is being set that
starting right out of the gate there’s going to be negotiation on
the most expensive drugs — cancer drugs, arthritis drugs,
anticoagulants.”

Three Democrats who resisted earlier efforts to give the federal
government the power to negotiate drug prices – Sen. Kyrsten Sinema
(AZ) and Reps. Scott Peters (CA) and Kurt Schrader (OR) – helped
broker the agreement and signaled they would support it.

“It’s not everything we all want,” Schumer said. “Many of us
would have wanted to go much further, but it’s a big step in
helping the American people deal with the price of drugs.”

Stephen Ubl, the president and CEO of drug industry trade group
PhRMA, panned the deal: “While we’re pleased to see changes to
Medicare that cap what seniors pay out of pocket for prescription
drugs, the proposal lets insurers and middlemen like pharmacy
benefit managers off the hook when it comes to lowering costs for
patients at the pharmacy counter. It threatens innovation and makes
a broken health care system even worse.

House Dems Consider Suspension of SALT Cap; Sanders Calls It
‘Beyond Unacceptable’

Blue state Democrats said Tuesday they are optimistic that
President Biden’s social spending package will include a five-year
suspension of the current $10,000 cap on state and local tax (SALT)
deductions.

“Today’s news is encouraging for a SALT cap repeal to be
included in the final reconciliation package,” Reps. Josh
Gottheimer (D-NJ), Tom Suozzi (D-NY) and Mikie Sherrill (D-NJ) said
in a joint statement. “We will continue to work with House and
Senate leadership to ensure the cap on the SALT deduction is
repealed.”

The lawmakers repeated their previous threat to withhold support
for the bill unless the SALT cap is repealed. “No SALT, no deal,”
they wrote. “No SALT, no dice.”

Critics of the SALT cap suspension or repeal — a group that
includes both liberals and conservatives — were quick to express
their opposition to the latest idea, which has been simmering on
the legislative back-burner for months.

“According to media reports, Democratic negotiators are working
on a repeal of the SALT deduction cap for up to five years, which
would cost $475 billion and give the richest 5% $400 billion in tax
cuts,” said Sen. Bernie Sanders (I-VT) in a statement. “As a
result, the top 1% would pay lower taxes after passage of the Build
Back Better plan than they did after the Trump tax cut in 2017.
This is beyond unacceptable.”

Sanders said that he was “open to a compromise approach which
protects the middle class in high tax states,” but he would “not
support more tax breaks for billionaires.”

House Ways and Means Committee Chairman Richard Neal (D-MA) said
that discussions on the issue are ongoing.

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