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Democrats forge ahead on drug pricing, eyeing wider deal with Manchin

Democratic leaders hope a new proposal can spur agreement on a broader spending package that has been stalled since last year

Sen. Joe Manchin III (D-W.Va.) on May 11 after voting against a measure that would have codified abortion rights in federal law. Democratic leaders are negotiating with Manchin now on prescription drug pricing and a broader economic package. (Kevin Dietsch/Getty Images)

Democratic leaders have finalized a revised proposal to lower prescription drug prices for seniors, part of a broader scramble to satisfy Sen. Joe Manchin (D-W.Va.) and resurrect a long-stalled economic package that they hope to advance as soon as this summer.

The development follows weeks of highly private talks between Senate Majority Leader Charles E. Schumer (D-N.Y.) and Manchin, a centrist holdout whose spending concerns scuttled an earlier bill known as the Build Back Better Act. It positions Democrats to jumpstart a key part of the legislative process around their agenda, even as they wrangle with the West Virginia lawmaker over other plans to lower health-care costs and combat climate change.

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The retooled prescription drug pricing proposal is largely similar to the blueprint that Democrats put forward last year, according to three people familiar with the matter, who spoke on the condition of anonymity to describe the deliberations. It generally empowers the U.S. government to negotiate the price of select drugs on behalf of Medicare beneficiaries, a move Democrats say will bring down costs in the coming years.

Under the proposal, the drug negotiations are set to begin in 2023, according to details obtained by The Washington Post. Democrats also have preserved plans to cap seniors’ drug costs under Medicare at $2,000 each year, while penalizing companies that raise prescription prices faster than inflation.

For the first time, though, Democrats newly aim to close what they see as a loophole that might have allowed future administrations to refrain from negotiating aggressively, according to the documents. The move is meant to ensure the government still seeks to keep drug prices down even if control of Washington changes, since Republicans long have opposed these negotiation powers, one of the people familiar with the matter said. Democrats also plan to extend additional support for a wider array of low-income seniors, hoping to help them afford their premiums and co-pays.

Manchin publicly supported his party’s last attempt to lower drug prices for seniors. Since then, he has said repeatedly he remains committed to the idea, especially as costs across the economy are rising. Despite his comments, though, other Democrats have remained uneasy about his preferences — a reflection of the tumultuous, shifting and extensive negotiations between the moderate West Virginian and members of his own party.

Democrats still hope to adopt the drug pricing plan as part of a larger economic package that they would advance through the narrowly divided Senate using the process known as reconciliation. The move allows the party to sidestep a GOP filibuster — but only if every Democrat, including Manchin, bands together with the aid of Vice President Harris’s tie-breaking vote.

Privately, Schumer has told members of his caucus that a swift resolution would allow them to bring a new bill to the floor in late July, one of the sources said. To meet that goal, Democrats plan to present their new drug pricing proposal as soon as this week to the Senate’s parliamentarian, the sources said. That seemingly bureaucratic step carries immense implications: The chamber’s chief rule-keeper has great sway in determining if lawmakers’ plans meet the strict rules of reconciliation, which restricts legislation to proposals that have a direct impact on the budget.

The process is lengthy and intricate, and if the drug pricing proposal does not fall within the guardrails, it could result in its exclusion entirely from Democrats’ final measure. Similar fears loomed large over the party’s attempts to address drug costs last year, particularly their proposals to cap the price of insulin, the fate of which remains unclear as bipartisan talks remain under way.

Sam Runyon, a spokesman for Manchin, said in a statement that the senator "has long advocated for proposals that would lower prescription drug costs for seniors and his support for this proposal has never been in question. He’s glad that all 50 Democrats agree.”

A spokesman for Schumer declined to comment, referring to the Democratic leader’s comments last week that the two have had “very good and productive discussions,” even though “there are still some issues that have to be resolved.”

The renewed effort among Democrats to resurrect their agenda reflects the political and economic urgency of the moment. For more than a year, party lawmakers have scrambled to deliver on promises they made during the last election, including pledges to lower drug costs. But they have largely been unable to do so, stymied by one of their own members — an opposition that many Democrats fear might cost them control of Congress come November.

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Manchin has maintained a resistance to spending as much as Democrats initially sought in their proposal known as the Build Back Better Act, which was once valued at roughly $2 trillion. He has argued that such spending could add to the debt and worsen inflation when costs already are skyrocketing. The senator’s position has put him at odds with others in his party, who maintain their initial bill was fully paid for with new federal revenue and might have helped families address their biggest sources of financial strain.

Still, Democrats cannot proceed without Manchin’s vote, a reality that already has forced them to sacrifice some of their most prized proposals — including those to provide free prekindergarten, lower the cost of child care, offer cheaper elder care, authorize national paid family and medical leave, and invest heavily in housing. They are now exploring a far smaller package, one that largely focuses on lowering drug costs, investing in green energy and making some changes to the tax code that can help reduce the deficit.

Many of those areas remain unresolved in talks between Manchin and Schumer, including a plan to extend enhanced subsidies to millions of Americans who purchase health insurance through national exchanges initially set up by the Affordable Care Act, the sources said. Without a resolution, more than 13 million people could see premium increases next year.

With drug pricing, Democrats have settled anew on ensuring access to all free vaccines for seniors in Medicare, who currently lack such benefits, according to plan details viewed by The Post. It further expands assistance for premiums and co-pays to a larger share of low-income elderly Americans. And the initiative aims to spur investment in generic medicines that might further provide savings to seniors, the sources said.

In the meantime, Democrats have sought to work with Republicans on a separate, stand-alone measure to provide financial relief to people with diabetes. The House this spring adopted a bill to cap insulin costs, and Sens. Jeanne Shaheen (D-N.H.) and Susan Collins (R-Maine) released their own proposal this month that makes additional revisions to the system. Schumer has pledged to bring it to the floor for a vote, though it remains unclear if it can win the support of at least 10 Senate Republicans to avoid a filibuster.

Rachel Roubein contributed to this report.