The Democrats’ historic compromise on prescription drug prices

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Democrats have agreed to a high-level deal that would allow Medicare to negotiate the prices of certain drugs. But moderates and allies in the pharmaceutical industry have succeeded in eliminating part of the party’s preferred approach.

Why is this important: If the deal eventually becomes law, Democrats can claim victory over what has been a top priority for years, and many Americans struggling to afford their drugs will enjoy relief.

The big picture: The deal addresses the three main pillars of Democrats’ drug pricing reform: it allows Medicare to negotiate the prices of certain drugs, it limits the amount that drug makers can raise prices in both Medicare and in the commercial market, and it redefines the Medicare part. D benefit in a way that drastically reduces the personal expenses of the elderly.

  • But negotiations are only allowed for a narrow subset of drugs, which will ultimately reduce the amount of savings the bill will achieve.
  • Experts say this approach will help mitigate the potential impact of the bill on inducing pharmaceutical companies to innovate on new drugs.

What they say : Leading Democrats praised the deal yesterday, including Sen. Kyrsten Sinema, D-Ariz. and Bob Menendez, DN.J., who feared the party was taking an overly aggressive approach.

  • Members who had wanted a more aggressive policy also issued statements of support.
  • “While not as broad as we originally proposed, I hope the deal’s new inflation rebate and spending cap for seniors will work in tandem with the deal. ‘Medicare negotiating authority to dramatically reduce prescription drug costs for Americans,’ House Energy and Commerce Chairman Frank Pallone, DN.J., said in a statement.

The other side: PhRMA torched the watered down plan.

  • “Under the guise of ‘negotiation’, this gives the government the power to dictate the value of a drug and leaves many patients with a future with less access to drugs and fewer new treatments,” said Stephen Ubl, CEO of PhRMA, in a statement.

What happened: Democrats have been rushing behind closed doors since last week when the White House released a Build Back Better framework that did not include prescription drug reform.

  • After discussions between the White House and Sinema, House Speaker Nancy Pelosi and the White House ultimately decided not to include the version of the Medicare negotiations that Sinema said he could support, sources say. close to discussions.
  • In their opinion, Sinema’s version was too weak. This would only have allowed for negotiations in Part B – not Part D, which covers drugs over the pharmacy counter.
  • Negotiations continued over the weekend until an agreement was reached yesterday.

What we are looking at: A two-page plan is not legislation, and the devil will be in the details as the party fleshes out its deal.

The essential : “Democrats are taking an important step in aligning our political march with our collective decades-long discourse, ”said Democratic strategist Chris Jennings.

  • “While far from flawless, this legislation will put the brakes on excessive drug prices as it uses savings to dramatically reduce prescription drug costs.”


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