Democrats scramble to get a drug-price compromise

Congressional Democrats are scrambling to work out a drug-price compromise that would cap seniors’ out-of-pocket costs for medicine and lower the price of insulin, with negotiators working through the weekend and Monday to convince key holdouts like Sen. Kyrsten Sinema, D-Ariz.

The compromise, which would allow Medicare to negotiate some prescription drug prices but significantly scale back Democrats’ earlier ambitions, comes after the White House abandoned a drug-pricing initiative in its social-spending package last week after acknowledging it lacked the votes. That decision prompted a barrage of complaints from patient advocates and liberal Democrats, who argued the party was ditching a key promise to voters and setting itself up for disaster in next year’s midterm elections.

“The moment is now. We must deliver on our promise to lower the amount of money our constituents pay for prescription drugs,” Rep. Angie Craig, D-Minn., and 14 colleagues representing competitive districts wrote to House leadership on Sunday.

But the deal has yet to win support from Sinema, Rep. Scott Peters of California and a handful of other congressional moderates who objected to the more sweeping overhaul advanced by Democrats earlier this year.

Party leaders have insisted that drug-price provisions are still viable, citing polling that shows broad support for them and touting their recent flurry of meetings to resurrect some proposals.

“We spent the whole weekend on prescription drug prices—we made some real headway,” Senate Finance Committee Chairman Ron Wyden, D-Ore., told reporters on Monday.

Sen. Robert Menendez, D-N.J., who has numerous drugmakers in his state and raised concerns about Democrats’ earlier legislation, added that he was optimistic about reaching a deal. “I think we can get there and I am waiting for the four corners of the agreement to be written,” he said.

Just a few holdouts might quash the fragile effort, however, because of Democrats’ slim margins in Congress; a single senator can scuttle any deal.

The last-ditch effort to secure drug-price changes, spearheaded by House Speaker Nancy Pelosi, D-Calif.; House Energy and Commerce Committee Chairman Frank Pallone Jr., D-N.J.; Rep. Peter Welch, D-Vt., and other House lawmakers, and a group of liberal senators, was still in flux as of Monday. Lawmakers had hoped for a vote on the broader $1.75 trillion social-spending package this week, with Congress set to be on recess next week, but aides cautioned that the timing is fluid and subject to negotiations with the holdouts.

Sen. Joe Manchin, D-W.Va., a key swing vote, on Monday also demanded that leaders slow their work on the package to allow for review, further complicating efforts to finalize the legislation.

In comments to reporters, Manchin said that the legislative package should be held until lawmakers could go through its contents. “I will not support a bill that is this consequential without thoroughly understanding the impact it will have on our national debt, our economy and the American people,” he said.

The drug-pricing compromise has coalesced around allowing Medicare—with nearly 50 million participants in its drug program—to negotiate the price of some drugs no longer covered by regulatory exclusivity, which protects drugmakers from generic competition. Under a tentative plan, Medicare would be able to negotiate with drugmakers five years after regulators approve certain small-molecule drugs—which account for most drugs sold in the United States—and 12 years after they approve the more complicated medications known as biologics, which target conditions like cancer, said four people who spoke on the condition of anonymity to detail the current talks.

Meanwhile, Democrats as of Monday were still negotiating over how much to cap out-of-pocket annual spending for seniors in Medicare’s drug benefit program. “We’re looking at [a] $2,000 [cap] to spare seniors from high drug costs as well as a monthly out-of-pocket cap that would limit their upfront costs,” Wyden said.

The Senate Finance chairman also said that Democrats wanted to guarantee that seniors enrolled in Medicare’s drug program would be able to access low-cost insulin, the lifesaving treatment for diabetic patients that has exploded in price in recent years.

“Every insulin product in Part D would be available at a low cost, and insulin prices would be negotiated by the government,” Wyden said.

Lawmakers also were eying a policy that would require drug manufacturers to pay a penalty to Medicare and commercial insurers when a drug’s price rises faster than the consumer price index, with staff debating which year would serve as the benchmark for inflation, said people with knowledge of the talks. The farther back in time the base year is set, the greater the policy’s power to lower drug prices. If it were set for this year, for instance, the policy would prevent future price gouging but not lower existing drug prices. Democrats were further considering whether to include excise taxes that penalize pharmaceutical companies for failing to lower prices.

But Sinema and Peters have remained noncommittal, frustrating leaders who had originally envisioned a much more expansive legislative package that would have required the federal government to negotiate the prices of at least 50 drugs per year and penalize manufacturers that refused to comply. That package, known as H.R. 3, was passed by House Democrats in the last Congress and embraced by President Biden this year.

Sinema and Peters’ offices did not respond to specific questions about the proposals.

The compromise framework is “a solid proposal at least as I’ve heard it so far,” Welch said in an interview. “The savings are going to be a lot less than I’d hope for in H.R. 3, but we’ve got to deal with the reality that we have no margin, so we’ve got to reach agreement with folks that have a different point of view.”

Democrats have sought for nearly three decades to allow Medicare to negotiate the price of prescription drugs, but have faced intense opposition from a deep-pocketed drug industry, which has spent more than $170 million just this year on federal lobbying to stop such legislation, according to OpenSecrets, a government transparency organization. The effort was also thrown into disarray when Biden on Thursday unveiled a legislative framework that excluded any drug-price changes, stunning some House lawmakers who had campaigned on the issue and thought a deal was close.

A Politico article reporting that Sinema and Biden had reached a separate deal on drug prices also confused some lawmakers and aides, who said they had no knowledge of any agreement with the senator, whose demands have shaped major swaths of the social-spending legislative package. Manchin, another key swing vote, has generally supported the push for prescription drug-price changes.

Democrats said they began strategizing on Thursday immediately after news broke that the planned legislation excluded drug-price changes, with senior administration officials saying they simply didn’t have the votes to pass it.

“There was a firestorm of reaction,” said Welch, saying the White House “was deluged with calls from the vast majority of members of the House and the Senate who support price negotiation and who understand it’s one of the most supported policies in the Build Back Better plan.”

Sens. Chris Murphy, D-Conn.; Tammy Baldwin, D-Wis.; Amy Klobuchar, D-Minn.; Bernie Sanders, I-Vt.; Elizabeth Warren, D-Mass.; and Mark Kelly, D-Ariz., met on Thursday to discuss a narrower path forward, according to two people who spoke on the condition of anonymity to describe the talks. They also spoke with Pallone and the White House, as party leaders coordinated their efforts.

Meanwhile, Craig and other Democrats in swing districts petitioned party leaders, arguing the party’s slender congressional majority rested on priorities like lowering drug prices, which has been shown to be highly popular among not just Democrats, but also independents and Republicans.

“You go through the initial stages of grief, I think,” said one congressional aide, who spoke on the condition of anonymity to discuss the in-progress deal. “Then you start looking forward and thinking about how you can address this, especially as it became clear that the negotiations weren’t necessarily over.”

The last-minute negotiations delayed a plan by congressional leaders to finalize legislative text on Sunday. Democrats are still eying a vote this week, with party leaders worried about the effort slipping too long and hindering passage of the broader social-spending package.

Lawmakers also have discussed how to repurpose any savings generated by lowering Medicare’s spending on drugs, with Sanders again appealing to Manchin to support expanding Medicare dental and vision benefits, another priority for some Democrats that was abandoned last week. But two officials suggested it was unlikely the final legislation would significantly address those issues.

Outside advocates such as AARP, the group for people 50 and older, have continued to demand that Democrats act on drug-price changes.

“It is a monumental mistake for Congress not to fix what’s fundamentally unfair—that Americans pay three times more for medications than other countries pay,” Jo Ann Jenkins, the CEO of AARP, wrote in a statement Monday. “Voters 50+ are a major force in every election, and they need and expect Congress to act now.”