Pelosi Energizes Battle to Lower Drug Prices
Source: The New York Times
A draft proposal by Speaker Nancy Pelosi would empower the federal government to negotiate lower prices for hundreds of prescription drugs, not only for Medicare but for the private market as well, injecting new urgency into Washington’s efforts to control the soaring price of pharmaceuticals.
The plan would revive an idea loathed by most congressional Republicans but long embraced by Democrats; President Trump expressed support for it during his 2016 campaign. By the time he hits the campaign trail again next year, Mr. Trump wants to persuade voters that he lowered the cost of prescription drugs — an issue that resonates with Americans of all political persuasions and a promise he has made repeatedly.
The speaker’s plan is the latest in a growing constellation of proposals. At the same time, the pharmaceutical industry is ramping up its campaign to kill them.
A potential curveball is a plan the Trump administration has been working on that would base the price that Medicare pays for some drugs that are administered by doctors, such as chemotherapy and other intravenous infusions, on what other countries, including Canada and Germany, pay for the same medications.
Here is a roundup of where the various proposals stand.
Speaker Pelosi’s price-control plan is on deck.
Ms. Pelosi’s bill, expected soon, would allow the government to negotiate the price of certain brand-name drugs that lack competition. The response from the White House will be critically important, as will the reaction from House liberals. Some of them pushed back on an initial proposal to let the Government Accountability Office, an independent investigative arm of Congress, decide a drug’s price if the government and manufacturer cannot agree.
Ms. Pelosi apparently listened: a draft of her plan published by The Hill on Monday night did not include that idea. The draft would not only allow the government to negotiate prices for 250 drugs in Medicare, but would also require the manufacturers to offer the agreed-on prices to private insurers, giving it huge reach. A senior Democratic aide said that the draft was “out of date,” adding, “Nothing is being distributed to the caucus yet because the committees are still discussing.”
Ms. Pelosi’s plan would impose a large fee on companies that refuse to negotiate — equal to 75 percent of the previous year’s sales of the drug, according to the draft. But liberals may want to take an even harder line with drug companies. One competing plan, from Representative Lloyd Doggett, Democrat of Texas, would let another manufacturer produce the drug in question as a generic if a company refused to “negotiate in good faith.”
Henry Connelly, a spokesman for Ms. Pelosi, said the speaker was reaching out widely for input.
“We continue to engage members across the caucus as the committees of jurisdiction work to develop the boldest, toughest possible bill to lower prescription drug prices for all Americans,” he said.
It remains to be seen if Mr. Trump, despite his earlier support for letting Medicare negotiate lower drug prices, will embrace such a plan. Senator Charles E. Grassley, Republican of Iowa and the chairman of the Senate Finance Committee, is hoping that the mere possibility will prompt more members of his party to support a drug-pricing bill he introduced over the summer with Senator Ron Wyden of Oregon, the committee’s top Democrat.
“I’m trying to tell Senate Republicans that they ought to consider this a moderate position,” he said of his bill in an interview Monday, “because it would be easy for the president to join Pelosi.”
The House has already passed a package of three bipartisan drug-pricing provisions that restrict anti-competitive behaviors by pharmaceutical companies, but they were bundled with another measure that would also reverse Trump administration policies intended to undermine the Affordable Care Act. That turned House Republicans against it and ensured it would go nowhere in the Senate.
The Senate Finance Committee is aiming to help older Americans.
The Finance Committee leadership’s bill cleared the panel in late July — but with most Republican members against it. Republicans were particularly concerned with a requirement that drug companies pay rebates to Medicare if they raised prices faster than inflation, which some called government price-fixing.
The bill would also create an out-of-pocket limit for Medicare drug costs, fixing it initially at $3,100 a year for Medicare beneficiaries. The committee estimated the bill would save the federal government $92 billion over a decade, with Medicare beneficiaries saving an additional $31 billion over the same period. The package has support from the White House, and Mr. Grassley said he was optimistic that House Democrats, with whom he has been communicating, would move similar legislation, perhaps improving the chances that Senator Mitch McConnell of Kentucky, the majority leader, would allow a vote on the finance bill.
But opposition is mounting. One conservative advocacy group, the dark-money American Future Fund, has run ads praising Republican members of the Finance Committee who voted against the bill, warning it would usher in “socialist price controls.”
The Senate Health Committee is looking at “surprise billing.”
Another bipartisan team, Senators Lamar Alexander, Republican of Tennessee, and Patty Murray, Democrat of Washington, introduced a bill in June that is largely focused on ending so-called surprise medical billing.
But their plan also addresses drug prices. One proposal takes aim at the games pharmaceutical manufacturers play to protect their monopolies and market share. Another seeks to ban so-called pay-for-delay deals in which brand-name manufacturers pay generic companies to delay bringing lower-cost drugs to market. Yet another would tinker with the exclusive six-month sales period that a generic drug maker gets when it is the first to market after a drug loses its patent protection.
The health committee approved the package overwhelmingly in June, but Mr. Alexander and Ms. Murray said a Senate vote would be delayed. The bill is facing stiff opposition from doctor and hospital groups because of the piece addressing surprise billing, which happens when patients unwittingly get hospital care from doctors who are not in their insurance network. In an interview Monday, Mr. Grassley said the hope was to combine the finance and health committee bills, and others that address high health care costs, in some form by year’s end.
Will Mr. Trump tie drug prices to other countries?
Over the summer, the president suffered setbacks on his own efforts to address drug costs: He killed a proposal that would have reduced out-of-pocket costs for Medicare beneficiaries out of concern that it would raise insurance premiums heading into his re-election campaign. And a federal judge threw out a new requirement that drug companies disclose their prices in television ads.
For the past few months, White House budget officials have been honing a more ambitious plan to base Medicare payments for certain drugs administered by doctors on the much lower prices that other countries pay, which the administration has said could bring down prices by 30 percent.
“We’re working on a favored-nation clause, where we pay whatever the lowest nation’s price is,” Mr. Trump told reporters in July. “Why should other nations like Canada — why should other nations pay much less than us? They’ve taken advantage of the system for a long time.”
Perhaps to court Mr. Trump’s support, Ms. Pelosi’s plan includes essentially the same idea, directing the government to base drug prices to the average paid in six other countries.
Despite intense industry lobbying against the idea and opposition from influential members of Congress, including Mr. Grassley, it seems most likely that the administration will at least release a proposed rule. In a recent meeting with reporters, Seema Verma, the head of the agency that runs Medicare and Medicaid, called it “a top priority for my department,” adding, “We are fast and furious on it.”