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Democrats roll back drug pricing plans to win over moderates

“It is alarming that a very modest bill can get even weaker,” said Representative Lloyd Doggett (D-Texas), who chairs the House Ways and Means health subcommittee. “I’m aware of the magnitude of our vote, but I don’t believe in any of the changes… do anything other than make it approach the absurd.”

Democrats’ thinking about drug prices and a host of other policies has recently been clouded by efforts to reduce the overall size of the $ 3.5 trillion social spending program to win over dodgers like Sense. Kyrsten Sinema (D-Arizona) and Joe Manchin (DW.Va.).

A senior Democratic official said negotiations between the House, Senate and White House on the pharmaceutical side of the bill went “quietly”. Another aide said a compromise should be “a bit more limited” than the House plan pushed by President Nancy Pelosi and supported by progressives, HR 3 (117), not only because of centrist concerns, but due to Senate rules regarding this type of legislation can be introduced through an expedited process known as reconciliation and passed in a party line vote. The House plan could save up to $ 700 billion over a decade, Congress estimates.

Lawmakers, aides and lobbyists close to the process said leaders are now discussing bringing fewer drugs to government negotiations and shifting the benchmark for such talks away from the prices paid in other developed countries.

Senate Finance Chairman Ron Wyden (D-Ore.) Said Wednesday he was in talks with members of the House who insist the bill is “responsive to innovation” in the pharmaceutical industry, and he suggested that negotiated prices could be limited to Medicare and not apply to the private market or employer-sponsored plans, as progressives originally sought.

“History shows that changes to Medicare almost always migrate to the private sector,” Wyden said. “Because Medicare is the flagship federal program, and when the private sector learns [the lower drug prices], they will insist on it.

The three centrist House Democrats who challenged Pelosi earlier this month and voted against the pricing plan backed by the leaders of the Energy and Trade Committee told POLITICO they had received the reassurance from commission officials that changes were underway and had been part of the negotiations of late. days.

The White House has also started making overtures to centrist Democrats to assess what compromise language on drug prices might look like, said a Democratic lobbyist familiar with the talks.

Rep. Kurt Schrader (D-Ore.) Said leaders were discussing options such as using a different benchmark for drug negotiations than the price paid in countries where drugs tend to sell for less. – a key element of the House leadership plan which, according to Schrader, “has no juice” among his centrist colleagues.

“The White House, Senate Finance, our fellow senators, we are all looking for a different vehicle that makes sense, that makes the connection between not restricting innovation and getting these drugs at the lowest possible cost on the market.” , did he declare. .

Rep. Peter Welch (D-Vt.), One of the leading House members working on drug pricing legislation, confirmed that the leadership plan has been reopened for debate, and “not just around the number of drugs “but” the whole process. “

It’s a coup for the pharmaceutical industry, which has spent tens of millions more on lobbying than any other industry so far this year, according to information gathered by watchdog group OpenSecrets. While the drug companies would rather kill the House plan altogether, weakening it might be their best case scenario given the Democrats’ complete control over Washington and pledging to sue the industry.

“The idea that you are going to have a [social] An infrastructure package that doesn’t take a pound of pharmaceutical flesh, to me, is laughable, ”a Republican healthcare lobbyist told POLITICO. “But the size of a pound of flesh will depend on the strength of the pharmaceutical industry.”

Washington’s large pharmaceutical industry lobby, Pharmaceutical Research and Manufacturers of America, declined to comment on the state of negotiations.

K Street sources, however, said the industry still intends to remove a growing excise tax. t comply. The Congressional Budget Office said in 2019 that the proposal would reduce the federal budget deficit by nearly $ 500 billion over 10 years, making it a key driver of the bill’s savings. But critics argue it could lead to a reduction in the number of new drugs coming to market.

“How do you know companies aren’t going to say ‘F — price control’ and pay the tax and then pass it on to consumers? Said another Republican lobbyist working on the issue. “There are going to be entire political campaigns built on this 95% tax … [Democrats] are going to be bombarded with television commercials.

Even Democrats who have long pushed Democratic leaders to stick to their guns over drug pricing now recognize that a watered-down version may be their best option with such slim majorities in the House and Senate.

“On the drug negotiations and everything else, three members can bring it down, so they have bargaining power,” Welch admitted. “And I think a number of the concerns they raise are in good faith, although I don’t agree with their argument. We have to be successful, so we have to try to work with them.

Too many changes, however, and progressives might balk and withdraw their support.

“For every action, there are side reactions,” he warned.