Senate Democrats are scraping together a last-minute plan to let Medicare negotiate prices directly with manufacturers for some prescription drugs ahead of the midterm elections, according to a summary of the plan obtained by CQ Roll Call.
The effort attempts to revive a key piece of Democrats’ sweeping social spending and climate bill after intra-party divisions killed the original legislation. Senate Majority Leader Charles E. Schumer, D-N.Y., has been working with the broader bill’s most vocal Democratic holdout, Sen. Joe Manchin III of West Virginia, who has consistently supported the idea of Medicare negotiation.
The Washington Post first reported the deal.
A source familiar with the plan said the plan is expected to have the full support of the caucus. Schumer will need the support of all 50 Senate Democrats to pass the bill under the chamber’s budget reconciliation process. But it’s not clear if the deal has the support of other moderate Democrats like Kyrsten Sinema, D-Ariz., or Bob Menendez, D-N.J.
Schumer is expected to present the plan to the parliamentarian by Tuesday, and is working on striking a deal with Manchin on tax and climate change provisions before the clock runs out. Schumer is aiming to put a new reconciliation package on the floor as early as late July.
The drug pricing agreement builds on a plan negotiated by moderate Democrats in November, which would have required the Department of Health and Human Services to negotiate prices within certain limits for up to 20 of the highest-cost drugs — plus insulin — in the Part B outpatient program and the Part D drug program.
The plan would also impose penalties for drug companies that hike prices faster than inflation and implement a $2,000 annual out-of-pocket cap for Part D patients. Insulin would be capped at $35 a month, a provision that Democrats are also working to pass as a standalone measure.
The new agreement would also strengthen language around the HHS secretary’s obligation to negotiate prices, in order to prevent what the summary calls a “rogue secretary” from watering down the provisions. New language would also limit Medicare premium increases — an expected side effect of capping patient copays. The negotiation process would begin in 2023.
The new agreement would also make vaccines free to Medicare patients and extend full subsidies for low-income enrollees from 135 percent of the federal poverty level up to 150 percent. The deal also includes language to prevent brand-name drugmakers from blocking generic products from coming to market.
The broader plan so far does not include other big-ticket health care items Democrats included in the original bill, including continuing expanded subsidies for health insurance premiums on the exchanges and boosting funding for home health care.
Democrats are increasingly focused on the expiring premium subsidies, which helped boost exchange enrollment to all-time highs. Manchin has so far been noncommittal in public comments about whether he supports extending the subsidies.
“Rising inflation is already forcing families to pay more at the grocery store and the gas pump,” Democratic Sens. John Hickenlooper and Michael Bennet, both of Colorado, wrote to Schumer earlier this month. “Time is of the essence to avoid serious increases on Coloradans’ health care costs and we need to help assure financial stability and continuity of care.”