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Democrats announce deal on prescription drug pricing as another part of spending plan comes into focus

The drug pricing deal is part of the broader $1.75 trillion tax and spending package which the White House hopes will soon pass.

Senate Majority Leader Charles E. Schumer (D-N.Y.) speaks to a staff member during a news conference following a Democratic policy luncheon on Capitol Hill on Oct. 26. (Jabin Botsford/The Washington Post)
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Democrats on Tuesday said they had clinched a deal on a plan that aims to lower prescription drug prices for millions of American seniors, part of an 11th-hour blitz to fine-tune their $1.75 trillion tax-and-spending plan in the hopes of bringing it to a vote as soon as this week.

Senate Majority Leader Charles E. Schumer (D-N.Y.) announced the agreement after a private meeting of party lawmakers, marking a potential end to a battle between some liberals and moderates over a policy priority that many Democrats had pitched over the course of the 2020 presidential election.

“Fixing prescription drug prices consistently has been a top issue for Americans year after year,” Schumer said at a news conference. “We’ve heard this from people across the country. . . . Today, we’ve taken a massive step forward in helping alleviate that problem.”

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Under the deal, the U.S. government would gain the ability to negotiate some drug prices on behalf of seniors who participate in Medicare. Such a power for the first time would give the benefit program leverage to drive down the price of medicine, allowing the federal government — along with millions of families — to save money.

At first, the Medicare negotiation powers would cover only a limited class of the 10 most expensive drugs, including medicines that help care for cancer patients, starting in 2023, according to lawmakers including Sen. Ron Wyden (D-Ore.), who helped negotiate the deal. Eventually, though, Medicare could negotiate on other drugs after they are no longer covered by certain government restrictions, which protects drugmakers from generic competition.

Democrats also plan to impose special, new caps on how much seniors would have to pay for insulin, which would be set at $35, seeking to help diabetes patients beset by sky-high price increases in recent years. Additionally, seniors who participate in the Medicare drug benefits plan known as Part D would see their yearly, out-of-pocket drug spending capped at $2,000, according to Wyden and other Democrats.

And their deal further includes “anti-price gouging penalties,” which Wyden explained as money paid back to the U.S. government when drug companies raise prices more than inflation. The penalties also apply to commercial health insurance plans, though the details are unclear.

“The prohibition on negotiation has almost been like a curse,” Wyden said. “There was a sense the government had its hands tied behind its back. And now a precedent is being set that, starting right out of the gate, there’s going to be negotiation on the most expensive drugs — cancer drugs, arthritis drugs, anticoagulants.”

“Once you set a precedent . . . you are really turning an important corner,” he said.

Much is still unknown about the plan, which had not been released in full by late Tuesday afternoon. Even as Democrats championed it as an early policy win, it still marked a significant departure from the more aggressive drug-pricing reforms that the party’s House lawmakers had put forward in recent years.

Still, it presented a potential resolution to one of the thorniest fights still remaining around Democrats’ still-forming $1.75 trillion package, which broadly aims to overhaul the country’s health care, education, climate and tax laws. Sen. Kyrsten Sinema (D-Ariz.), who had opposed an earlier version of Democrats’ drug pricing plans, joined other moderates in offering her support for the deal.

The agreement came on a busy day for Democrats, shortly after House Speaker Nancy Pelosi (D-Calif.) told her caucus that negotiators were nearing resolution on a slew of outstanding items, including prescription drugs, plans to combat climate change, and changes to the immigration system.

The developments could open the door for the House to vote as soon as this week on the $1.75 trillion tax-and-spending measure as well as a separate, second package to improve the nation’s roads, bridges, pipes, ports and Internet connections. Behind the scenes, Pelosi has pushed Democrats to wrap up work on writing the bill as soon as possible, setting in motion a plan by which the chamber could vote perhaps on Thursday.

But Pelosi also did not lay down a specific timeline in her latest public comments or private talks with lawmakers, a reflection of the uncertainty that has plagued the party for days. Repeatedly, Democratic leaders have said they are close to delivering President Biden his signature spending initiatives — only to be stymied by their own internal disputes.

The prospect of another such setback arose again Tuesday. A group of five moderate Democrats in the House — led by Rep. Stephanie Murphy (D-Fla.), the leader of the Blue Dog Coalition — signaled ongoing concerns about the “true cost” of the $1.75 trillion legislation. In a letter to Pelosi, they said they would not vote for the bill until they could see a formal report as to whether it is financed in full. And they demanded 72 hours to review it, and a clear sense as to whether it can survive in the Senate, before the speaker brings it up for House consideration.

The request could have the effect of pushing the debate into another week, depending on how long it takes Democrats to finalize drafting their spending proposal. The timeline could delay not only the $1.75 trillion plan but also the infrastructure measure that lawmakers have paired with it — a plan that the centrists seek to pass most.

“While we understand the needs of the nation are great, we believe our job as legislators is to provide the due diligence required to properly serve our constituents,” the moderates wrote.

The letter echoes some of the same concerns raised a day earlier by Sen. Joe Manchin III (D-W.Va.), a moderate who repeatedly has sought to whittle down Democrats’ spending ambitions. He lamented that the still-forming bill relies on potential budgetary gimmicks, fretted the speed at which Democratic leaders are trying to adopt it, and said he needed more time to study its overall fiscal impact — a position he repeated Tuesday.

“I’m negotiating in good faith,” a perturbed Manchin told reporters on Tuesday. Asked if it is reasonable for the House to vote this week, the senator replied: “The House can do whatever it wants to do. . . . I think I was very clear yesterday.”

Many Democrats over the past day have shrugged off Manchin’s latest comments, believing the House could still act imminently on the two bills. In a sign of the growing impatience, Sen. Bernie Sanders (I-Vt.) on Tuesday responded by lamenting the fact that the “so-called negotiations have gone on week after week, month after month.”

Citing its support among the American public, Sanders added that Democrats still needed to make the package stronger — but hoped to act expediently.

“It's finally got to come to an end,” he said, pledging to try to push for a vote in the Senate “hopefully next week.”

In the meantime, talks about the scope of that measure continued behind closed doors on Tuesday, though lawmakers seemed encouraged by their progress. Democrats appeared especially optimistic about their ability to achieve a prescription drug pricing compromise, after Biden initially omitted the longtime priority from the original $1.75 trillion blueprint he presented to House Democrats last week.

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In a sign of its prospects, Sinema offered praise in a statement from her spokesman on Tuesday, calling it “historic.” Earlier, Rep. Scott Peters (D-Calif.) — a key holdout on House Democrats’ more sweeping prescription drug pricing legislation — is supportive of a yet-to-be announced deal, according to his spokesperson Allie Polaski. And still a third Democrat who opposed the chamber’s more sweeping plan, Rep. Kurt Schrader (D-Ore.) is “confident a deal is within reach,” according to a spokesperson.

Democrats also began to muscle through a slew of other long-simmering policy fights.

For months, a cadre of party lawmakers — many hailing from states including New York and California — have sought in the context of the $1.75 trillion package to lift a cap on a key tax reduction that chiefly benefits Americans in higher-cost areas. Absent a fix to the policy, known as SALT, some lawmakers even had threatened to vote against the entire bill.

In a sign of progress, Democratic aides on Tuesday said they had potentially resolved their logjam, reinstating the full SALT reduction for the next five years, starting retroactively in 2021. The tentative agreement prompted three of its advocates — Reps. Josh Gottheimer (D-N.J.), Tom Suozzi (D-N.Y.) and Mikie Sherrill (D-N.J.) — to call it “encouraging” in a statement, adding: “No SALT, no deal. No SALT, no dice.”

But the early contours of the deal still generated new dissent — this time from Sanders, who blasted the SALT fix as “beyond unacceptable.”

“I am open to a compromise approach which protects the middle class in high tax states. I will not support more tax breaks for billionaires,” he said.

With immigration, meanwhile, Democrats continued to scramble to devise a way to advance their policy priorities that meshed with the strict rules they plan to invoke to pass the $1.75 trillion package in the Senate. Party lawmakers hope in the coming days to make their third and likely final case to the chamber’s parliamentarian on a proposal that would provide work permits to undocumented immigrants, but not a pathway to citizenship, which has already struck down for not following budgetary rules.

“I hope soon,” responded Sen. Richard J. Durbin (D-Ill.), when asked about the timing of the meeting.

Adding to the challenge, the provisions appeared to generate fresh angst in the House. Several vulnerable Democrats representing competitive swing districts — known as Frontliners by the Democratic Congressional Campaign Committee — have told leadership they do not feel comfortable voting on immigration programs that have yet to be ironed out, especially if they are likely to be stripped out by the Senate’s chief rule-keeper in the end.