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The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

Pharma wages last-ditch fight against drug pricing bill

The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

Good morning, Early Birds. Rep. Rodney Davis lost his primary last month — but at least he hasn't exploded. Tips: earlytips@washpost.com. Thanks for waking up with us.

In today’s edition Trump's chosen candidate won the Republican primary for governor in Maryland … Same-sex marriage protections head to Senate with Republican support … The Senate advances microchips legislation ... J. Michelle Childs confirmed to be a Circuit Court Judge for the District of Columbia Circuit ... What we're watching: A gun vote in the House … but first …

On K Street

Pharma lobby wages last-ditch fight against drug pricing bill

When Democrats started drafting the multitrillion-dollar social spending bill known as the Build Back Better Act last year, much of corporate America — the oil-and-gas industry, private equity, the farm lobby — fought against policies that would harm their interests.

All of the provisions that impact these business sectors have been stripped out of the bill since then as Sens. Joe Manchin III (D-W.Va.) and, to a lesser extent, Kyrsten Sinema (D-Ariz.) and other lawmakers forced Democrats to narrow the scope of the bill. 

Now that Democrats have decided to try to pass a bill that includes only the two provisions Manchin has agreed to advance — prescription drug pricing and extending Affordable Care Act subsidies — the powerful pharmaceutical industry is fighting a lonely battle to stop it.

The pharmaceutical lobby's strategy is built on making the case to Senate Democrats that the bill won’t do as much as the leaders claim to reduce prices for consumers, according to three Democratic lobbyists and a person familiar with the effort.

“It’s down to a very small handful of members of the Senate who could make the difference here,” said Dan Leonard, the president and chief executive of the Association for Accessible Medicines, which represents companies that make generic versions of drugs.

But there’s little indication that any Democratic senator will defy President Biden and their colleagues to vote against the bill, especially with Manchin on board. Doing so would deny Democrats a potent campaign issue ahead of the midterm elections. 

“We are excited about doing prescription drugs. This is something we've waited for a very long time. This is going to be a major, major accomplishment to help people bring down inflation. It has so many good provisions in it,” Senate Majority Leader Chuck Schumer (D-N.Y.) said on Tuesday after he met with Senate Democrats. “We are proud of this.”

There are few indications that pharmaceutical lobbyists will have any more luck in the House.

Rep. Kurt Schrader (D-Ore.), one of three Democrats who voted against an earlier drug pricing proposal in committee last year, “is encouraged to see movement on the drug pricing framework he worked hard to craft last fall and is closely monitoring and engaging with his colleagues as the Senate works through necessary technical tweaks to abide with Senate process,” according to a Schrader spokesman. (Schrader ultimately voted for the House’s Build Back Better bill that included revised drug pricing language.)

A long-shot lobbying campaign

The long odds haven’t stopped the pharmaceutical industry from lobbying to kill the bill — or to at least win changes that could make it more palatable.

The latest version of the legislation has gone “from bad to worse for patients,” Debra DeShong, an executive vice president at Pharmaceutical Research and Manufacturers of America, the drug industry's powerful trade group, said earlier this month.

The bill won’t do as much as Democrats claim to lower drug prices in the short term, pharmaceutical lobbyists argue. It would give companies less incentive to develop cheaper generic versions of drugs, they claim. And while the details of the bill are still being finalized, much of the savings it would wring from drug companies would go toward reducing the deficit rather than further measures to bring down drug prices.

“It’s like salt in the wound,” one Democratic lobbyist complained.

Democrats are hoping to reap a political benefit from the bill — which could be harder to do if its impact isn't felt for years.

It's true that not all of provisions in the bill kick in right away, according to Tricia Neuman, a senior vice president at the Kaiser Family Foundation. But some of them could start driving down prices as soon as next year.

While people on Medicare wouldn’t start to see negotiated drug prices until 2026, the inflation rebate provisions would start in 2023 and “could dampen drug price increases starting that year for people with Medicare and private insurance.”

The bill would also eliminate coinsurance payments above the catastrophic threshold for people on Medicare starting in 2024. “This could provide significant help to people who have really high out-of-pocket drug expenditures, such as people with cancer and rheumatoid arthritis,” Neuman wrote in an email to The Early.

Republicans are still ‘nos’

One set of lawmakers pharmaceutical lobbyists probably don’t need to worry about: Republicans.

Senate Minority Leader Mitch McConnell (R-Ky.) said on Tuesday that he’ll leave it to Senate Republican to decide how to vote on the bill, but he's opposed. 

“I don't think socializing prices that is putting the government in charge of this is the way to continue the kind of healthy effective pharmaceutical industry that has saved the lives of millions of Americans,” he said. 

McConnell refused to put a bipartisan prescription drug bill on the floor in 2019. The measure, negotiated between Sens. Charles E. Grassley (R-Iowa) and Ron Wyden (D-Ore.) passed out of the Senate Finance Committee with the support of six Republicans and all Democrats, but McConnell, who was majority leader at the time, was against the proposal.

Sen. Rob Portman (R-Ohio) was one of the Republicans who backed the bipartisan bill three years ago. But he’s unlikely to support the Democrats’ bill now.

“My understanding is they're gonna go further” than the 2019 bill, which also enabled Medicare to negotiate the cost of drugs, Portman said.

And Sen. Mitt Romney (R-Utah) will likely vote against the measure because it would continue subsidies for the Affordable Care Act and that “is wrong,” he said.

The campaign

Trump defeats Hogan in gubernatorial proxy war: Del. Dan Cox, a first-term delegate who embraced Donald Trump’s rhetoric and attended the Jan. 6, 2021, rally, won the Republican nomination over Gov. Larry Hogan’s pick and his former Cabinet secretary Kelly Schulz, our colleagues Erin Cox, Ovetta Wiggins and Antonio Olivo report.

  • “The Republican primary race for governor tested the potency of the former president’s influence in a state that’s also embraced the pragmatic conservatism of term-limited Hogan, who won twice by appealing to independents and Democrats.”
  • Meanwhile, results were still trickling in for the Democratic nomination, as of early Wednesday morning. Best-selling author and political newcomer Wes Moore took an early lead over former U.S. labor secretary Tom Perez and Comptroller Peter Franchot. Hundreds of thousands of Democratic votes, including mail-in ballots, were uncounted.

🗳️More results from the night’s top races:

Attorney General

  • U.S. Rep. Anthony G. Brown won the Democratic nomination for attorney general following a contentious race against former district judge Katie Curran O’Malley. “The victory positions Brown to make history as Maryland’s first Black attorney general if he is elected in November,” our colleague Joe Heim writes.

House

  • 4th Congressional District: Former Prince George’s state’s attorney Glenn Ivey defeated ex-congresswoman Donna F. Edwards in the state’s highest-profile congressional matchup. Millions of dollars in outside spending “gave Ivey the resources to be competitive with the much better-known Edwards, who had backing from major Democratic figures including House Speaker Nancy Pelosi (D-Calif.) and powerhouse advocacy groups such as Emily’s List,” our colleague Meagan Flynn writes.
  • 6th Congressional District: Del. Neil C. Parrott (R-Washington County) won the Republican primary Tuesday. He will face Rep. David Trone (D) this fall in a seat the GOP is hoping to flip, per Flynn. Parrott defeated several competitors, including 25-year-old Matthew Foldi who received House Minority Leader Kevin McCarthy’s endorsement.

On the Hill

House passes protections for same-sex and interracial marriage

A bill that would federally protect same-sex marriages sailed through the House on Tuesday with bipartisan support, a historic moment that marks a capstone to the nation’s quarter-century evolution on LGBTQ rights and a response to fears that an emboldened Supreme Court was poised to take away hard-won civil rights, Marianna Sotomayor, Leigh Ann and Paul Kane report. 

  • Now, on the cusp of seizing the majority of the House, Republicans split into competing camps over the onetime hot-button issue as Democrats were unified in protecting a right that the Supreme Court had issued seven years ago. Minority Leader Kevin McCarthy (Calif.) and Minority Whip Steve Scalise (La.) voted against the bill while House Republican Conference Chairwoman Elise Stefanik (N.Y.) and National Republican Congressional Committee Chair Tom Emmer (Minn.) voted in support.

Marianna, Leigh Ann and Paul add: “Yet just more than 20 percent of the Republican conference voted in support of the legislation, a sign that even though marriage equality has become more broadly accepted across the country, Republicans don’t have a unified view on what some consider progressive social issues.”

  • McCarthy, who did not whip the vote and let Republicans vote as they wished, told The Washington Post he didn’t vote for it “because it was a political game by the Democrats.”

Senate leaders were noncommittal about a vote in the Senate, noting how few legislative days are left before the midterms. 

Sen. Brian Schatz (D-Hawaii) tweeted that the Senate should vote. He told The Early he thinks it would pass and he's encouraged Schumer to bring it to the floor. 

The Senate advances microchips legislation; Childs confirmed

The Senate advanced microchip manufacturing legislation Tuesday night with broad bipartisan support. Sixteen Republicans supported it, and Sen. Bernie Sanders (I-Vt.) was the only non-Republican to vote against it. 

The 64-34 vote total, above the 60-vote threshold to avoid a filibuster, is a clear sign that the measure will advance through the Senate. 

The bill voted on was the newest version of the legislation, which had several iterations. It included $52 billion in subsidies for microchip manufacturing as well as tax credits for building semiconductor plants. But it also includes the provisions agreed upon by the Senate Commerce Committee, such as research and development and additional science provisions. 

In other bipartisan news

The Senate confirmed J. Michelle Childs to be a Circuit Court Judge for the District of Columbia Circuit, which is considered the second most important court behind the Supreme Court. She won the support of 15 Republicans, a rare bipartisan vote on a crucial judgeship. 

Childs was on the short list to sit on the Supreme Court with the support of her home-state Republican Sens. Tim Scott and Lindsey O. Graham of South Carolina for a seat that went to Ketanji Brown Jackson

What we're watching

We're watching what two House committees are doing on guns. First, the mark up in the House Judiciary Committee on an assault weapons ban. It must pass through committee before it's brought to the floor — if it's brought to the floor. Some Democratic members from more conservative districts don't want to vote on the issue.

The House Oversight and Reform Committee has rescheduled to next week a hearing on the business and profits of gun manufactures. Chief executives of three gun manufacturers have been invited to testify, including Marty Daniel, the CEO of Daniel Defense, the manufacturer of the weapon used in the Uvalde shooting.

Meanwhile, Ukrainian first lady Olena Zelenska will address Congress today about the ongoing security, economic and humanitarian conditions in the country. The remarks will come less than two months after Congress approved a $40 billion aid package and as the Russian invasion enters its sixth month. 

The Data

Maryland’s delayed election results, visualized: “Maryland is the only state in the country that forbids election officials from reviewing ballots and counting them until two days after the election,” our colleague Erin Cox reports. “That process may not begin until 10 a.m. on Thursday.”

The Media

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Thanks for reading. You can also follow us on Twitter: @theodoricmeyer and @LACaldwellDC.

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