Los Angeles Times

Democrats clash over drug pricing

Opposition to one provision threatens Biden’s $3.5-trillion social safety net bill.

- By Jennifer Haberkorn

WASHINGTON — Democrats are sharply divided over whether to require drugmakers to negotiate prices with the federal government, a rift threatenin­g key parts of President Biden’s $3.5-trillion social safety net bill — including the possible expansion of Medicare and Obamacare — and one that could put the entire effort at risk.

Three House Democrats on Wednesday blocked the House Energy and Commerce Committee from advancing a provision to allow drug-pricing negotiatio­n in favor of an alternativ­e that other Democrats say is far weaker.

Given the slim majority Democrats have in the House, if they remain opposed, they would be just one vote away from being able to block the entire effort on the House floor, assuming all Republican­s remain opposed as expected.

The intraparty disputes underscore the sharp policy difference­s Democrats are trying to overcome as they try to pass Biden’s “Build Back Better” plan, which aims to enact a series of social benefits, such as universal prekinderg­arten, child-care tax credits and elder care.

Although the drug policy was approved by a rival committee later Wednesday afternoon, the “no” votes amount to an escalation of brewing friction among Democrats. The policy was approved by the Ways and Means Committee, at which it picked up another “no” vote from Rep. Stephanie Murphy (D-Fla.).

Democrats hope to enact their overall plan in the coming weeks, but the policy difference­s and the slim margins in both chambers suggest that consensus could take months to reach. Biden was reported to have met Wednesday with two moderate Senate Democrats who oppose the $3.5-trillion price tag, Sens. Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona.

The prescripti­on drug policy is key to the rest of Democrats’ plans because it would bring in an estimated $700 billion over a decade that would be used to shore up other parts of the healthcare system, such as Medicare and the 2010 Affordable Care Act, often called Obamacare.

Rep. Scott Peters (D-San Diego) is leading the opposition to Democrats’ drug price plan, arguing that it would decimate investment in the pharmaceut­ical industry and threaten jobs, including about 27,000 in San Diego.

“The promise we made was to lower drug prices, to negotiate with drug manufactur­ers,” Peters said of Democrats’ decade-long pledge to voters. “We did not promise to kill the goose that lays the golden egg.”

Peters, as well as Reps. Kurt Schrader (D-Ore.) and Kathleen Rice (D-N.Y.), the three Democrats who oppose the plan, have drawn the ire of fellow Democrats, progressiv­es and advocacy groups, who for years have been fighting to lower drug prices.

Peters and Schrader’s alternativ­e would allow negotiatio­n on only a fraction of all prescripti­on drugs, unlike the broader plan in the existing proposal.

It would also enact a yearly out-of-pocket cap for Medicare enrollees who make a modest income and cap out-of-pocket insulin costs. Peters estimates that his bill would bring in $200 billion, far less than the $700 billion in savings in the existing plan.

Progressiv­es and Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) say it doesn’t do nearly enough to rein in the pharmaceut­ical industry’s prices.

“A lot of our voters would be pretty disappoint­ed to find out that the drug industry has the ability to stop the Democratic Party from going after their profits,” Sen. Christophe­r S. Murphy (DConn.) said. “If they’re not willing to go in that direction, then they’ve got to identify other” ways to pay for healthcare improvemen­ts.

Pallone had lobbied the trio to stay on board to advance the bill out of committee. Although Democrats have other means of advancing the provision through another committee, they will need those votes on the House floor.

Pallone insisted that Democrats will be able to enact some kind of prescripti­on drug reform in a bill that can get through the House and Senate, a sentiment echoed by a spokespers­on for House Speaker Nancy Pelosi (D-San Francisco).

“Polling consistent­ly shows immense bipartisan support for Democrats’ drug price negotiatio­n legislatio­n, including overwhelmi­ng majorities of Republican­s and independen­ts who are fed up with Big Pharma charging Americans so much more than they charge for the same medicines overseas,” Pelosi spokespers­on Henry Connelly said.

The three House Democrats’ strategy is to find agreement with centrists in the Senate, Peters said. That would send a message to House Democrats to modify their prescripti­on drug plan if they want to get it to Biden’s desk.

“I’ll be around all week and happy to talk to any senators who want to finalize something so that we can get done before next week,” Peters said. “Enough of us have expressed concern that

we should be working on a different course. I want to be constructi­ve.”

In the Senate, Democrats are similarly divided over prescripti­on drug policy, but generally are closer to Peters’ proposal than the House plan.

“There are difference­s of opinion,” Senate Finance Committee Chairman Ron Wyden (D-Ore.) said, adding that “a number” of senators say they can’t support the House bill.

His committee has not yet publicly released a drug pricing plan, but senators say several proposals have been floated.

Drugmakers, which strongly oppose price negotiatio­n, hailed the defeat in committee and said House Democratic leaders should take the trio’s concerns seriously.

“These concerns have been known for months, yet they’ve been ignored by House leaders,” said Debra DeShong, a spokespers­on for the Pharmaceut­ical Research and Manufactur­ers of America. “This should be a strong signal to the House leadership that there is broad support for lowering costs for patients without sacrificin­g access to new cures and treatments.”

Prescripti­on drug pricing is just the first conflict on health policy in the bill. Democrats aren’t aligned on how they would spend the savings created by forcing drugmakers to negotiate their prices with the federal government.

They can use it to extend Medicaid benefits to people who live in GOP-controlled states that have not expanded the program under the Affordable Care Act. Or they can expand Medicare to include vision, hearing and dental benefits. And they can use it to make permanent the bump to ACA subsidies that they enacted on a short-term basis this year.

“It’s a competitio­n for a limited amount of funds, which right now is funded exclusivel­y by a bill that is not yet law,” said Rep. Lloyd Doggett (D-Texas), who is advocating that the money be spent to expand Medicaid to Republican-led states such as his.

“If we have a competitio­n now [between expanding Medicaid versus adding new Medicare benefits], not having the prescripti­on drug policy really intensifie­s that, and it also raises questions of whether alternativ­e sources of funding need to be found,” Doggett said.

Many Democrats privately admit that they won’t be able to do all these things in one bill. There are discussion­s about implementi­ng all of them on a short-term basis, with hopes that they will be so popular that even a future GOP-controlled Congress won’t have the political will to not renew them, a risky move given the contentiou­s nature of the ACA.

Another option is that the Medicare expansion — coverage of vision, hearing and dental programs, which is strongly backed by progressiv­es — will go head-tohead with making permanent the expansion of ACA subsidies, a plan strongly supported by Pelosi.

Pelosi has said Democrats won’t have to choose. “I think both will be present. That’s not a problem,” she said last week.

“It’s probably not a false choice given the pressure that we’re going to be under,” Murphy said. “But at this point, we don’t negotiate against ourselves. We’re going to fight for both.”

 ?? Sam Hodgson San Diego Union-Tribune ?? REP. SCOTT PETERS (D-San Diego), shown in 2019, says the drug pricing plan would decimate investment in the pharmaceut­ical industry and threaten jobs.
Sam Hodgson San Diego Union-Tribune REP. SCOTT PETERS (D-San Diego), shown in 2019, says the drug pricing plan would decimate investment in the pharmaceut­ical industry and threaten jobs.

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