Pelosi Announces Prescription Drug Pricing Deal

By Joseph Lord
Joseph Lord
Joseph Lord
Joseph Lord is a Congressional reporter for The Epoch Times who focuses on the Democrats. He got his Bachelor of Arts in Philosophy from Clemson University and was a scholar in the Lyceum Program.
November 2, 2021 Updated: November 2, 2021

Speaker of the House Nancy Pelosi (D-Calif.) on Tuesday announced that Democrats had reached an agreement on prescription drug pricing provisions in their recently reduced $1.75 trillion reconciliation bill.

The deal was announced by a statement posted to the speaker’s website.

“For a generation, House Democrats have been fighting to deliver real drug price negotiations that will lower costs,” Pelosi said. “With today’s agreement on strong lower drug price provisions for the Build Back Better Act, Democrats have a path forward to make good on this transformational agenda for our seniors.”

She then turned to the details of the new plan, which Pelosi said would “halt Big Pharma’s outrageous price hikes above inflation, not just for seniors but for all Americans.”

Originally, Democrats hoped to include an ambitious, wide-reaching policy that would have set federal price caps on prescription drugs. The proposed price caps would have set them at levels comparable to what other developed countries pay for the same medication.

In Europe, many countries impose price caps on medications, causing consumer prices for prescription drugs to be substantially lower; In the United States no such restrictions exist, allowing pharmaceutical companies to charge extremely high prices when compared to European nations.

Sen. Bernie Sanders (I-Vt.), the author of the original budget proposal, emphasized the importance of the provision and the pharmaceutical industry’s efforts to kill the provision in a tweet.

“Pharma has spent hundreds of millions opposing our efforts to lower prescription drug costs,” Sanders wrote. “Meanwhile, the six major drug companies made $50 billion in profits last year and pay their CEOs outrageous salaries. We must stop Pharma greed and pass the Reconciliation Bill.”

Several other Democrats were behind the price capping proposal, but Democrats were far from united behind this ambitious strategy.

Some moderates in the party expressed concerns that price caps could cause innovation in medical technology and medication to stagnate. Several moderates voted against moving the provision out of committee.

Later, Reps. Scott Peters (D-Calif.) and Kurt Schrader (D-Ore.) introduced a significantly reduced reform to take the place of Democrats’ original proposal.

The suggested compromise bill would have allowed Medicare to negotiate lower drug costs, which it cannot currently do. However, this would not extend to private insurance companies.

The bill’s purpose, the lawmakers wrote, is “To amend … the Social Security Act to lower prescription drug prices in the Medicare and Medicaid programs, to improve transparency related to pharmaceutical prices and transactions, to lower patients’ out-of-pocket costs, and to ensure accountability to taxpayers.”

Schrader and Peters were joined by co-sponsors Rice, Rep. Lou Correa (D-Calif.), and Rep. Stephanie Murphy (D-Fla.).

This suggested compromise by moderates is essentially what Democrats agreed to today: A bill to lower costs by allowing Medicare to negotiate with pharmaceuticals to lower prices.

As a salve to progressives, the bill will also reduce out-of-pocket co-pays and create a $2,000 limit on out-of-pocket prescription drug costs for seniors on Medicare.

“We are now finishing the drafting of the legislative text to reflect this important agreement,” Pelosi said of the deal. “I am pleased with the compromise reached by House Members and Senator Sinema,” referring to Sen. Kyrsten Sinema (D-Ariz.).

Notably absent is Sen. Joe Manchin (D-W. Va.), a critical swing-voter in the narrowly held upper chamber.

In the past, Manchin has said that he opposes any effort to expand Medicare, and indicated that he preferred to address the program’s long-term viability.

On Sept. 23, the West Virginia Democrat told reporters: “I will say this about Medicare. We need to stabilize it. By 2026, you understand, the trust fund is going to be insolvent. That means there’s going to be an awful lot of cuts to a lot of people who depend on the Medicare they’re getting today. I want to make sure that we are stabilizing what we have before we start going down this expansion.”

It is unclear whether the moderate will support the compromise or not, but his support is critical for any Democratic policy goal.

Joseph Lord
Joseph Lord is a Congressional reporter for The Epoch Times who focuses on the Democrats. He got his Bachelor of Arts in Philosophy from Clemson University and was a scholar in the Lyceum Program.