Senate Majority Leader Chuck Schumer Tees Up A Prescription Drug Pricing Plan That Has ‘President’ Manchin’s Blessing

Democrats are breaking up the Build Back Better initiative into the individual parts for which they can get the support of serial obstructionists like Sens. “Manchinema” under the Senate’s internal rules for the “budget reconciliation” process.

The initial hope had been to include a prescription drug pricing initiative in the larger Build Back Better initiative that stalled last year. Senate Majority Leader Chuck Schumer (D-N.Y.) is now crafting a smaller version of that bill, or at least the parts agreed to by holdouts like Sen. Joe Manchin (D-W.Va.).

Huffington Post reports, Democrats Take Small Step Toward Reviving Joe Biden’s Domestic Policy Agenda:

Senate Democrats on Wednesday took a key step toward advancing a proposal that would lower the price of prescription drugs in America, making some progress to revive President Joe Biden’s domestic policy agenda.

They’re still a long way from making it a reality. Schumer and Manchin have not announced any agreement on provisions dealing with climate and energy, nor on a fix to avert a spike in health care insurance costs under the Affordable Care Act.

Anything that makes the bill expensive could also be a problem. Manchin is concerned that more government spending would exacerbate inflation at a time when the cost of living is skyrocketing.

But on Wednesday, Schumer submitted to the Senate parliamentarian the text of the prescription drug proposal, according to a source familiar with the process.

The parliamentarian verifies whether the legislation is allowed under the Senate’s internal rules for the “budget reconciliation” process Democrats are using for this legislation. A reconciliation bill can get through the Senate with a simple majority instead of the usual 60 votes needed to clear a filibuster.

Democrats want to give the U.S. government the same kind of authority to limit drug prices held by the governments of other developed countries. The proposal would work by requiring Medicare to negotiate prices of some drugs directly with manufacturers, leveraging the social insurance program’s massive buying power to wring savings from drugmakers.

The new proposal would also cap a Medicare patient’s out-of-pocket expenses at $2,000 per year.

The Congressional Budget Office has said that a House-passed version of the prescription drug reform would save the government a lot of money — $345 billion over a decade — which is partly why it’s the first thing Democrats are advancing, since it meets Manchin’s criteria for fiscal responsibility.

Democrats could use higher tax revenue to offset the cost of additional spending provisions, such as on Obamacare premiums, but face a host of internal disagreements on taxes that never got resolved during last year’s Build Back Better debate.

Democratic leaders do seem to have realized that they can’t win Manchin’s support for previous proposals on things like a child allowance or paid leave.

The Washington Post recently editorialized, Joe Manchin is choking off one of America’s best anti-poverty programs:

The expanded child tax credit (CTC) has been one of the United States’ most successful anti-poverty programs in decades, and it’s shameful that Congress has not extended it for 2022. About 3 million children were kept out of poverty when the program started last July.

[W]ild claims were made about how families were using the money. Sen. Joe Manchin III (D-W.Va.) reportedly worried parents would use the funds to buy drugs. There’s no evidence to back this up. In fact, there’s more and more data showing that households with kids, especially lower- and moderate-income ones, spent the bulk of the money on the basics: Food, housing, clothing and items for school. Still, Manchin’s bogus objections killed any hopes of renewing the program after it ended in December.

[T]he Federal Reserve recently released one of the most definitive reportson how families spent their CTC payments. It shows, yet again, that the money largely went toward meeting basic needs.

The Fed’s findings underscore what a lifeline the CTC payments were to poorer families. Americans reported their highest-ever “financial well-being” in 2021, with nearly 80 percent saying they are at least doing okay financially. The Fed explicitly noted that “parents experienced particularly large gains” in their financial well-being thanks largely to the CTC payments.

All these benefits came at a relatively small cost … While lawmakers are rightly concerned about high inflation, this program added little to it. The payments were largely spent on basics or saved. If anything, high inflation is another reason lawmakers should be renewing this policy. Low-income families are the hardest hit by high gas, food and rent costs. In the past five months, there has been a 20 percent increase in households with children that lack sufficient food. We know how to help struggling families with kids. Why isn’t Congress acting?

Schumer’s decision to press forward with reconciliation could hamper the fate of his other priority this summer — bipartisan legislation aiming to make the U.S. more competitive with China by boosting research and semiconductor development. Senate Minority Leader Mitch McConnell (R-Ky.) has threatened to block the bill, known as the U.S. Innovation and Competition Act, if Democrats don’t abandon reconciliation.

“Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” McConnell said last week.

Democrats clearly have more work to do to pass a reconciliation bill. The prescription drug component is in some ways the easiest part since Manchin has been supportive of its goal all along.

But McConnell’s ultimatum signals that Democrats are far enough along in the process for Republicans to be taking it seriously once again.

Jake Johnson adds, With Manchin’s backing, Senate Dems unveil plan to let Medicare negotiate drug prices:

Senate Democrats, including serial obstructionist Joe Manchin of West Virginia, have reportedly reached a deal on a plan that would allow Medicare to negotiate the prices of a small subset of prescription drugs directly with pharmaceutical companies, a change that is massively popular with voters across party lines.

“Already this year, drug corporations have raised the price of over 800 prescription medicines by more than 5%.”

On Wednesday, Senate Majority Leader Chuck Schumer (D-N.Y.) submitted 190 pages of legislative text to the chamber’s parliamentarian, an unelected official tasked with opining on whether bill provisions comply with the arcane rules of budget reconciliation—the process Democrats are using to evade GOP opposition and the 60-vote filibuster rule.

The new text largely resembles the drug pricing plan that the House of Representatives passed in November as part of the broader Build Back Better package, which Manchin tanked just a month later.

Over the past several weeks, Schumer and Manchin have been engaged in talks to revive certain elements of the package, a centerpiece of President Joe Biden’s domestic agenda. Any new bill, which would include the prescription drug proposal, is expected to be far smaller than the $1.75 trillion package that House Democrats approved last year.

In its current form, Senate Democrats’ drug pricing plan would cap Medicare recipients’ out-of-pocket prescription medicine costs at $2,000 a year, penalize drug companies that raise prices at a faster rate than inflation, and allow Medicare to “negotiate and, if applicable, renegotiate maximum fair prices” for a limited number of costly drugs beginning in 2023.

The pharmaceutical industry, whose Capitol Hill lobbyists outnumber members of Congress, has aggressively fought such changes as it continues to push up prices for lifesaving medicines. A study published last month in the medical journal JAMA estimated that nearly half of all new brand-name prescription medicines launched in the U.S. in 2020 and 2021 came with an original annual price tag of $150,000 or more.

In late May, Manchin tweeted that he supports “allowing Medicare to negotiate drug prices,” prompting Sen. Bernie Sanders (I-Vt.) to respond:

Sen. Manchin is right. Let’s cut drug prices in half by strengthening the provision in the House-passed Build Back Better legislation to allow Medicare to negotiate drug prices like the VA has done for years, and pass the whole package with 50 votes next week. It's time to vote. https://t.co/WZKyNdGfBW

— Bernie Sanders (@SenSanders) June 1, 2022

Following reports last week that Senate Democrats had reached a tentative deal on a proposal to rein in prescription drug prices—which are significantly higher in the U.S. than in other wealthy countries—Margarida Jorge of Lower Drug Prices Now said in a statement that “this is a once-in-a-generation chance for Democrats to finally deliver on their promises to lower drug prices.”

“At a time when the price of everything is going up, this bill, if enacted, would finally rein in Big Pharma’s price gouging and make medicines more affordable for millions of Americans,” said Jorge. “Already this year, drug corporations have raised the price of over 800 prescription medicines by more than 5%. And more increases are expected. Under our current broken system, Americans pay more than twice as much for the same drugs as people in most other countries.””This compromise will lower prices, cut costs, and stop the drug corporations from raising their prices faster than the rate of inflation,” Jorge added. “We applaud Senate Democrats for advancing this vital piece of legislation one more step and encourage them to get it over the finish line without delay. The American people can not afford to wait any longer for affordable medicines to take care of themselves and their families.”

Its all well and good that “President” Manchin has given his blessing for this bill, but this ignores the other prima donna Democratic diva in the room, Sen. Kyrsten Sinema aka Pharma Girl.

As Politico reported last October, Sinema reached prescription drug negotiation deal with Biden:

Kyrsten Sinema [aka “Pharma Girl”] struck an agreement on prescription drug pricing with President Joe Biden as part of Democrats’ social spending talks, though it’s at risk of ultimately being excluded as the party tries to reach a deal that can pass.

The Arizona Democrat was somewhat reluctant to strike a deal on prescription drug price negotiation, a key campaign plank for many Democrats. But a source familiar said the president and Sinema were able to see eye to eye in the end.

“Sinema struck a deal with President Biden to include Medicare drug negotiation in the framework, consistent with the proposal authored by Congressman Scott Peters, with some edits in the insulin space to further lower costs for consumers. It is unclear if it will be included in the framework this morning — that decision was left with House leadership and Chairman Pallone,” the source said.

House Democrats fired back on Thursday. A Democratic aide said they were never party to the Sinema-White House agreement and saw it as a “Trojan horse devised by Big Pharma.”

The prescription drug pricing language was ultimately left out of the framework the White House released publicly on Thursday morning, leaving its fate uncertain. Many progressives view the Peters proposal as insufficient, and a senior administration official said that drug pricing reform lacks the votes in Congress at the moment to advance.

An aide to the Energy and Commerce Committee said it never received a deal between Biden and Sinema and was not involved in back-and-forth negotiations about it. Pallone (D-N.J.) declined to say whether he had spoken to Sinema and said he believed ultimately Democrats will reach agreement on the issue.

“If we don’t, it’s only because [the pharmaceutical industry]’s really trying to kill everything and try to convince their lackeys, as they call them in Congress, not to do anything,” Pallone said.

Adding the drug pricing compromise to any final bill, if Biden tries to do so, would test whether he can coax progressives into a deal struck with Sinema, one of two high-profile holdouts for a party-line spending bill that’s now been cut in half from its initial $3.5 trillion target. Democrats may dislike what Sinema negotiated, but rejecting the president’s work would be altogether different.

That the White House has instead, for now, fully dropped drug pricing from the bill is a testament to the power of the pharmaceutical industry, which has for months poured millions of dollars into lobbying and advertising to kill the effort. Peters has pointed to the 100,000-plus drug industry jobs in his district to argue for a lighter touch in cost controls.

“It is really outrageous that year after year, members of Congress talk about the high cost of prescription drugs. And yet, year after year, we are not able to do anything about it,” said Sen. Bernie Sanders (I-Vt.).

Then there is the “Grim Reaper of Democracy,” Mitch McConnell, threatening to “burn it all down” like a domestic terrorist. He will do it. He doesn’t care about Americans. He only cares about his own obsessive desire to control power.