Prescription drug price reform on the line in Biden’s big social spending bill
Should the drug-pricing provisions survive, experts say the proposed set of policy changes would make a start toward price reductions, though the effort won’t entirely solve the drug-pricing crisis. (Getty Images)
WASHINGTON — Among the most potentially transformational changes in the Democrats’ massive social and climate bill pending in the Senate are a set of long-sought changes intended to tamp down the fast-rising cost of prescription drugs.
The $2 trillion spending package would ensure Americans don’t pay more than $35 when they pick up a new vial of insulin from their pharmacy, and would penalize drugmakers if they hike medicine prices faster than the inflation rate.
It also would, for the first time, allow Medicare to negotiate the prices of some of the most expensive drugs it provides to seniors.
But it’s not clear if several of the provisions aimed at finally taking substantive action on soaring drug prices will remain in the final version of the bill, known as “Build Back Better.”
That decision will be up to the Senate parliamentarian, who has been meeting privately with senators from both parties to issue guidance on whether certain pieces of the massive bill comply with the chamber’s rules.
The path forward is tricky logistically because Democrats are using the reconciliation process to advance the measure with just 50 votes instead of the typical 60 needed. That means they can push through legislation without winning support from any Republicans.
The closed-door discussions have not been publicly relayed by lawmakers in the room. But reports from Politico and other news outlets have suggested that GOP opponents are challenging whether aspects that apply to private insurance plans comply with a Senate rule requiring provisions in a reconciliation bill to directly affect federal spending or revenue.
Democrats have said they are cautiously optimistic the provisions will survive, and have defended them as long overdue help for those struggling to afford health care.
“They’re way out of step with the American people if they somehow think that a $35 insurance copay (for insulin) … is somehow not something the American people approve of,” said Sen. Ron Wyden, an Oregon Democrat and the top lawmaker on the Finance Committee, which is heavily involved in crafting the proposal.
Sky-high drug prices
Should the drug-pricing provisions survive, experts say the proposed set of policy changes would make a start toward price reductions, though the effort won’t entirely solve the drug-pricing crisis.
“The pharmaceutical industry is perhaps the most powerful lobby of any of the lobbies in the country,” said Dr. Paul Ginsburg, a professor of health policy at the University of Southern California and a nonresident senior fellow at the Brookings Institution.
“They are a formidable opponent. Some people are pleasantly surprised that anything can be done that lowers drug prices.”
Some proposals are recycled from past legislation, such as capping out-of-pocket drug costs for those enrolled in Medicare Part D, and the inflation cap, which previously passed out of the Senate Finance panel but never were taken up on the floor.
The out-of-pocket cap for Medicare Part D would start at $2,000 in 2024. Drugmakers also would be required to pay rebates to patients if they raise prices faster than inflation.
On negotiating drug prices, the Democrats’ package doesn’t go as far as a recent House measure, H.R. 3, which Ginsburg characterized as changing minds about what the federal government could do to implement pricing reforms.
That earlier measure would have made deeper price cuts, tying prices to cheaper ones abroad, and more drugs would have been reviewed. Still, the version in Build Back Better, which would begin in 2025, would start with negotiations over 10 high-priced drugs, and increase the number over time, reaching 100 in six years.
“I think it will be a building block,” Ginsburg said, noting the strong public support for continuing to find ways to reduce rising costs.
House Democrats touted the pending provisions when they released a scathing report recently blasting the business practices of drug manufacturers that have led to the soaring prices.
“The evidence overwhelmingly supports the need to pass the Build Back Better Act, which will empower Medicare to negotiate for lower prices, restrain price increases, and cap out-of-pocket patient costs for insulin and other drugs,” wrote House Oversight Committee Chairwoman Carolyn Maloney, D-N.Y.
The bill wouldn’t address some practices criticized in the House report, such as manufacturers making small tweaks that allow them to avoid competition for longer periods of time.
Still, the spending package has drawn strong opposition from the pharmaceutical lobby, which has said it ignores the role of insurance companies in rising prices, and would curtail research investments needed to make breakthroughs on new treatments.
“The bill inserts the heavy hand of government into America’s medicine cabinet, and we know when government bureaucrats set the price of medicine, patients ultimately have less access to treatments and cures,” said Stephen Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America, the largest drugmaker lobbying group.
‘We will wait for a call’
It’s unclear when the Senate parliamentarian, Elizabeth MacDonough, may offer guidance on the drug-pricing provisions.
MacDonough, who is nonpartisan and provides advice and help on Senate rules and procedures, already nixed a set of immigration proposals from the bill. That section was aimed at providing temporary protections for undocumented immigrants.
“The parliamentarian is the umpire,” Wyden told reporters during a recent Capitol hallway scrum. “We will wait for a call, and then we’ll make decisions.”
President Joe Biden has urged the Senate to get the bill to his desk, holding a recent event at the White House with a young woman who has struggled to afford her insulin.
“We can agree that prescription drugs are outrageously expensive in this country,” Biden said at the White House. “It doesn’t need to be that way.”
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