Democrats have added a provision to their social spending package that would “stop price gouging” in the prescription drug industry, according to Senate Majority Leader Chuck Schumer.
If passed, the government would be allowed to negotiate prices for medications covered by Medicare.
The New York Times explains:
The prescription drug compromise was hard-fought and required Democrats to overcome an onslaught of lobbying by the powerful pharmaceutical industry, which succeeded in substantially watering down their initial bid to allow the government to negotiate prices on a far broader universe of drugs. The final deal includes a $2,000 annual cap on out-of-pocket expenditures by older Americans facing catastrophic health issues, a strict $35 monthly cap on insulin expenses and automatic rebates on drugs whose prices rise faster than inflation.
“Fixing prescription drug pricing has consistently been a top issue for Americans year after year, including the vast majority of both Democrats and Republicans who want to see a change because they simply cannot afford their medications,” said Schumer (D-NY). “Today, we’ve taken a massive step forward in helping alleviate that problem.”
Democrats had initially proposed a more robust measure to curb prescription drug prices, but they couldn’t win support from holdouts in their own party. The Wall Street Journal reports:
Drug pricing provisions were left out of the $1.85 trillion framework released by the White House last week.
President Biden supports having Medicare negotiate for lower prices, but left any provision out of the framework due to his assessment of what could pass Congress, a senior White House official said previously. Proponents argue the approach is popular with the public and would save the federal government hundreds of billions of dollars, while detractors say it would limit patients’ choices and diminish drugmakers’ ability to produce new treatments.
According to a recent poll by Morning Consult/POLITICO, “allowing medicare to negotiate prescription drug prices” is the third most popular proposal associated with the social spending bill.
Crucially, the plan announced Tuesday has the support of Sen. Kyrsten Sinema, the Arizona Democrat who has blocked several elements of President Joe Biden’s economic agenda.
In a statement, Sinema said she “welcomes a new agreement on a historic, transformative Medicare drug negotiation plan that will reduce out-of-pocket costs for seniors” and “save taxpayer dollars.”
The Times adds:
The completion of the prescription drug section could be among the final major changes to a $1.85 trillion climate change and social safety net bill that Democratic leaders hope to bring to a House vote by the end of the week. Smaller issues remain to be ironed out, including a way to deal with methane, a powerful greenhouse gas, and the state and local tax deduction, which some House members say must be restored to win their votes.
