Congressional Democrats have reached agreement on a series of provisions meant to lower the price of prescription drugs that will be added to the $1.75 trillion social spending bill, Senate Majority Leader Chuck Schumer announced Tuesday.
“This deal will directly reduce out-of-pocket drug spending for millions of patients every time they visit the pharmacy or doctor,” Schumer (D-NY) said during a news conference on Capitol Hill, later adding: “It will reform the entire industry to stop price-gouging, and change both drug company and heath insurance incentives to make sure our country’s drug pricing system benefits patients, not corporations.”
Under the agreement, Medicare will be able to negotiate prescription drug prices in its Part B and Part D program. The compromise also caps out-of-pocket Medicare costs at $2,000 per year and reduces the price of insulin.
“The price of insulin will go down from $600 an injection, or a dose, to $35, which is where it should always have been if we would have had proper laws in place,” said Schumer, who added that Sen. Kyrsten Sinema (D-Ariz.) “has told me she supports this agreement, so I think we’re there.”
In a statement, Sinema’s office said she “welcomes a new agreement on a historic, transformative Medicare drug negotiation plan that will reduce out-of-pocket costs for seniors — ensuring drug prices cannot rise faster than inflation — save taxpayer dollars, and protect innovation to ensure Arizonans and Americans have access to life-saving medications, and new cures and therapeutics.”
The issue of prescription drug pricing has been a sticking point for Sinema, who along with Sen. Joe Manchin (D-W.Va.) has withheld support for the measure in an effort to reduce the amount of spending and remove programs they consider government overreach.
The penalties on drug manufacturers for raising prices beyond the inflation rate will be retroactive to Oct. 1. Senate Finance Committee Chairman Ron Wyden (D-Ore.) has said that under the agreement, the government would begin negotiating prices on 10 drugs in 2023, the Wall Street Journal reported Tuesday.
The agreement announced by Schumer moves Democrats closer to finalizing the text of the bill, which they are trying to ram through Congress without Republican support, but substantial issues remain.
Manchin said Monday he would not support any social spending bill until he received more clarity about the “serious effects of inflation and debt” that would result from its passage.
“What I see are shell games, budget gimmicks that make the real cost of the so-called $1.75 trillion dollar bill estimated to be almost twice that amount,” he said.
And on Tuesday, Manchin told reporters he had not signed off on the $1.75 trillion framework announced by President Biden Friday before he departed on a trip to Europe.
“The White House knew exactly where I stood,” Manchin said. “There was a couple of concerns that we had that we needed to work through.”
The West Virginian also insisted that Democrats were “not in a rush right now” to get the bill done.
“The rush was trying to get everything before the president went overseas,” Manchin said, having earlier told reporters that the House should take up and pass a bipartisan $1.2 trillion infrastructure bill that the Senate approved in August.
“I feel basically it’s time to do something. The president’s over there. He went there. He asked [House Democrats] for something before he left and everyone ignored it,” he said. “I didn’t ignore it. I thought something could have been done that was a very easy ask. Just vote for the bipartisan infrastructure bill.”
Two major outstanding issues plaguing negotiations over the larger package are immigration and taxes. Progressive lawmakers have pushed for language laying out a path to citizenship for illegal immigrants to be included in the bill, even though the Senate parliamentarian has twice ruled the topic to be out of bounds.
Meanwhile, House Democratic moderates from high-tax states like New York, New Jersey, and California, have pushed for a five-year repeal of a $10,000 cap on state and local tax (SALT) deductions that was enshrined in former President Donald Trump’s 2017 tax reform initiative.
However, that push has drawn a negative response from progressives like Senate Budget Committee chairman Bernie Sanders (D-Vt.), who tweeted Tuesday evening that repealing the SALT cap was “beyond unacceptable.”
“At a time of massive income and wealth inequality, the last thing we should be doing is giving more tax breaks to the very rich. Democrats campaigned and won on an agenda that demands that the very wealthy finally pay their fair share, not one that gives them more tax breaks,” Sanders said. “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.”