Sen. Joe Manchin (D-W.Va.) reached an agreement with Senate Majority Leader Chuck Schumer on a bill that they say will lower prescription drug costs. The measure would allow Medicare to begin negotiating directly with pharmaceutical companies starting in 2023, and cap out-of-pocket costs for Medicare patients at $2,000 per year. It would also impose something called an “inflation rebate” that would require drug companies to pay back consumers if they raise prices above inflation.
The drug pricing deal was originally part of a reconciliation package known as the “Build Back Better” bill, but Manchin balked at the $2 trillion price tag and the bill died aborning.
But Biden needed the Build Back Better bill, or some version of it, to give Democrats a record to take to the voters for midterms, so he asked Chuck Schumer to keep after Manchin to get something — anything — passed.
It appears now that Schumer has succeeded.
Other aspects included in the original text of Build Back Better — pertaining to climate change and tax reform — are still being negotiated within the Democratic caucus.
“Senator Manchin has long advocated for proposals that would lower prescription drug costs for seniors, and his support for this proposal has never been in question,” Manchin’s communications director, Sam Runyon, said in a statement last week. “He’s glad that all 50 Democrats agree.”
The deal on prescription drugs also calls for providing free vaccines for seniors and expanding co-pay assistance for low-income individuals.
Plans are afoot to make the Obamacare subsidies part of the drug price package, but there’s no agreement among Senate Democrats. Meanwhile, Democrats in the Senate will submit the drug pricing bill to make sure it passes muster with the parliamentarian and doesn’t run afoul of the “Byrd Rule.” As for the other parts of Build Back Better, they’re still in limbo.
A source familiar with the proposal, who asked not to be identified, said Senate Democrats were still working on the provisions to tackle climate change and raise taxes, which would be coupled with the Medicare proposal.
While negotiations continue, the Medicare portion was to be submitted to the Senate parliamentarian to ensure it complies with complex budget rules that would allow Democrats to bypass Republicans and pass it with a simple majority in the 100-seat chamber with Vice President Kamala Harris breaking the tie.
The drug pricing deal is far less ambitious than the proposal put forward last November.
While it still would allow government-run Medicare to negotiate lower drug prices for the elderly, those prices would not apply to people with private health insurance, a provision included in an earlier, more ambitious, proposal.
It would allow the government to negotiate the price of up to 20 drugs, rather than the 250 drugs progressives had sought.
The concern is that companies will just jack up prices on drugs not part of the negotiations. It’s why we haven’t heard much of a stink from Big Pharma on this bill.
Since drug costs directly impact the budget, the Senate parliamentarian should have no trouble allowing the bill to go through the Senate using reconciliation.
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