Senate crafts Pelosi alternative on drug prices

Senate Democrats are crafting their own proposal to lower prescription drug prices, an alternative to Speaker Nancy Pelosi’s (D-Calif.) plan, amid doubts about whether the far-reaching House bill can get all 50 Senate Democrats on board.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) is taking the lead in working on the proposal, but Senate Majority Leader Charles Schumer’s (D-N.Y.) staff has also been meeting with outside groups and is engaged on the issue, according to people familiar with the conversations.

The flurry of activity indicates that lowering prescription drug prices is a top priority for Democrats and could be included in an upcoming legislative package along with President Biden’s priorities on infrastructure and other issues in the American Jobs Plan and American Families Plan. 

But the party will have to figure out how to bridge the divide between their progressive and moderate wings on drug prices, given that they cannot lose a single Senate Democrat on party-line votes. 

Some moderate Democrats have raised concerns with how far the House bill, known as H.R. 3, goes in cracking down on drug prices, and the Senate bill is expected to be less far-reaching, though the details are far from finalized.

“I’m spending a lot of time talking to senators,” Wyden told reporters on Tuesday. “I spent a fair amount of time during recess trying to find an approach that produces some real common ground.” 

Asked about getting moderate Democrats on board, Wyden said: “Each side is going to have to give. I mean that’s, heaven forbid, how you legislate.” 

In addition to the usual question marks of Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), drug pricing advocates have focused on moderate Democrats including Sens. Bob Menendez (N.J.) and Tom Carper (Del.). 

Menendez, who represents a state home to many pharmaceutical companies, voted against a measure to allow Medicare to negotiate drug prices in the Senate Finance Committee in 2019. 

The Democratic group Protect Our Care on Tuesday sent out a press release pointing to new polls showing support for lowering drug prices among voters specifically in the home states of these lawmakers: Arizona, Delaware, New Jersey and West Virginia.  

“What I have seen time and time again is that we seek to draw revenue from the pharmaceutical industry, but then we don’t put it into lower prices [for consumers],” Menendez told The Hill on Monday, saying he had discussed his concerns with Wyden. “So unless I see the connection to lower prices, I’m not going to be supportive of anything.” 

Carper, meanwhile, said that he is pushing for reviving a bipartisan bill from Wyden and Sen. Chuck Grassley (R-Iowa) from 2019. That measure does not include the ability for Medicare to negotiate drug prices, though, so it would fall far short of what many Democrats want. 

The core of the House bill, which passed that chamber in 2019 and is a top priority for Pelosi, is allowing the secretary of Health and Human Services to negotiate lower prices. Wyden said he supports that idea in broad terms, and some form of negotiation is expected to be a part of the Senate bill. 

But some moderate Democrats think the details of how the House bill carries out negotiations go too far. In particular, before there is any negotiation, the House bill caps drug prices based on the prices paid in certain other wealthy countries, a provision that some moderates view as going too far. They say that provision, known as international reference pricing, is the government simply setting prices, not negotiating them.

“International reference pricing is characterized as negotiation, but it’s really not, it really just says that if prices in other places are a certain level, we set the price at this level; that’s not negotiation,” said Rep. Scott Peters (D-Calif.), who helped lead a letter with 10 moderate House Democrats last month raising concerns with the House bill’s consequences for drug companies’ ability to innovate and develop new drugs. 

Peters added that as it is currently written, the House drug pricing bill “won’t pass the Senate” and that he would not vote for it in its current form in the House either. 

The Senate bill could remove the international reference pricing provision, sources say. 

Illustrating the complex dynamics at work, though, a Pelosi spokesman defended the international reference pricing provision on Tuesday. 

“Polling consistently shows that stopping Big Pharma’s outrageous practice of charging Americans three times or more than they charge for the same medicines overseas is one of the most popular parts of HR3 among Republican and Independent voters, which is one of the reasons the bill has overwhelming support across Americans of all political parties,” said Henry Connelly, the Pelosi spokesman. 

Another point of debate among Democrats is whether to apply the lower prices from negotiation to people who get their insurance outside of Medicare, through their employers. The House bill applies the lower prices to people with private insurance plans too, significantly broadening its scope. 

Wyden said Tuesday it would be “fair to say” there is not a consensus on whether to include that provision in the Senate measure. He said senators are also discussing how to structure the mechanism for Medicare to negotiate prices.

The Senate measure is expected to take the contours of the 2019 Grassley-Wyden legislation and add some form of negotiation to it, meaning Republicans are not expected to support it. 

Even among the moderate Democrats, there is not a consensus approach. Rep. Jake Auchincloss (D-Mass.), who co-led the letter last month with Peters, said that he will support whatever the final drug pricing legislation put forward by Democrats is, a different approach than Peters. 

“I’ve said repeatedly to people who have asked me: I am going to vote for what the Democrats bring to the floor,” he told The Hill.  

He said, though, that he is working with Pelosi’s office to try to make changes to the bill, in part by bringing in pharmacy benefit managers, not just drug companies themselves, to try to lower patients’ out of pocket costs.  

The savings from drug pricing, around $500 billion over 10 years from the House bill, could then be used for other health care priorities, like adding dental, vision and hearing benefits to Medicare, or lowering the Medicare eligibility age to 60, which progressives are pushing for. 

But a scaled-down Senate bill would likely produce less savings. 

Sen. Debbie Stabenow (D-Mich.) said Tuesday that she would “love to” be able to get $500 billion in savings in the Senate bill as well, but added: “I don’t know if it’s possible; that’s what we’re working on.”