Drug-Price Negotiation Clings to Life as Democrats Revise Bill

  • Democrats rewriting spending package amid Manchin criticism
  • Drug pricing, health coverage provisions expected to remain

Bloomberg Government subscribers get the stories like this first. Act now and gain unlimited access to everything you need to know. Learn more.

Sen. Joe Manchin sent his party scrambling this week to revise its sweeping domestic policy agenda on almost everything but drug-price negotiation and bolstering Obamacare.

Manchin (D-W.Va.) Monday repeated his opposition to a House-passed slate of tax changes, climate provisions, and other major policy goals Democrats are seeking. That package, called the Build Back Better Act, would also empower the government to negotiate with drugmakers and pave the way for a major expansion of Medicaid.

Senate Majority Leader Charles Schumer (D-N.Y.) said in a letter to his colleagues that he will bring up a revised version of the bill for a vote in 2022. Whether Manchin will support the new version remains to be seen, but groups aligned with Democrats say the health provisions are unlikely to be dropped because the senator supports them and some are needed to offset the spending in the package.

“It will be smaller but I don’t think it will fail,” Leslie Dach, chair of Protect Our Care, said. “Manchin has been very positive about the health care provisions, particularly about Medicare negotiations and lowering health insurance premiums, and there is every reason to believe they will be in the bill that passes.”

Manchin Outlines Tax, Policy Changes He’d Want in Biden Bill

Photo: Sarah Silbiger/Bloomberg
Sen. Joe Manchin (D-W.Va.) speaks to reporters at the U.S. Capitol on Dec. 16, 2021.

Manchin in a Monday radio interview said he’s concerned about the overall size of the roughly $2 trillion package. He opposes temporary safety-net programs that are likely to be extended, as well as programs with no work requirements or income limits.

Manchin said he’s supportive of drug-price negotiation efforts but warned the current version might exclude too many new drugs.

“If you’re going to negotiate then negotiate,” he said. “Don’t start picking and choosing and playing games.”

The bill would subject only older drugs, some more than a decade after first approval, to government negotiations. Empowering the government to seek lower drug prices and requiring drugmakers to pay back profits from raising the cost of medicines above inflation would reduce government spending by about $128.2 billion over 10 years, according to the Congressional Budget Office.

Regeneron, Janssen Drugs Fit Profile Targeted in Spending Bill

A Senate Democratic aide said lawmakers aren’t looking to make major changes to the drug price provisions largely because it could cost them other votes.

Deal With Holdouts

Democratic leaders struck a deal with holdouts such as Sen. Kyrsten Sinema (D-Ariz.) ahead of the House vote. Sinema and others have sought to preserve exclusivity granted for new drugs to ensure drugmakers can still profit from developing new medicines.

Democrats say the health provisions of the package represent a core part of their policy agenda that must advance via the reconciliation process, which allows them to pass legislation by a simple majority in the Senate.

“There may not be another opportunity anytime soon for Democrats” to act on drug prices, Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, warned in a statement Sunday. “At a time when many American families are concerned about basic costs of living going up, Democrats cannot allow their health care costs to increase unnecessarily.”

Rep. Pramila Jayapal (D-Wash.) told reporters the time has come for President Joe Biden to use his authority to enact the party’s domestic agenda “in every arena immediately.”

Democrats have garnered no Republican support for their drug pricing plan or efforts to bolster the Affordable Care Act’s insurance premium supports, so a future bipartisan agreement is unlikely.

Democrats likely will trim down the size of the package and seek a vote, Spencer Perlman, managing partner and director of health care research at the policy research and consulting firm Veda Partners, wrote Monday.

“Sen. Manchin embraces the major health care offsets in the BBB, meaning there may be room for some meaningful healthcare spending in a skinny BBB,” he wrote, referring to the Build Back Better Act.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bgov.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Robin Meszoly at rmeszoly@bgov.com

Stay informed with more news like this – from the largest team of reporters on Capitol Hill – subscribe to Bloomberg Government today. Learn more.