The Senate parliamentarian narrowed Democrats’ plan for curbing drug prices but left it mostly unscathed Saturday, Democrats said, as party leaders prepared to start moving their sprawling economic bill through the chamber.
Elizabeth MacDonough, the chamber’s rules arbiter, said provisions must be removed that would force drugmakers to pay rebates if their prices rise above inflation for products they sell to private insurers. Pharmaceutical companies would have to pay those penalties if their prices for drugs bought by Medicare rise too high.
Other restrictions on rising pharmaceutical costs survived, including letting Medicare negotiate costs for the drugs it buys, capping seniors’ out-of-pocket expenses and providing free vaccines.
“This is a major victory for the American people,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement. “While there was one unfortunate ruling in that the inflation rebate is more limited in scope, the overall program remains intact and we are one step closer to finally taking on Big Pharma and lowering Rx drug prices for millions of Americans.”
The parliamentarian’s decision came after a 10-day period that saw Democrats resurrect top components of President Joe Biden’s domestic agenda after they seemingly were dead. In rapid-fire deals with Democrats’ two most unpredictable senators — first conservative Joe Manchin of West Virginia, then Arizona centrist Kyrsten Sinema — Schumer pieced together a wide-ranging package addressing climate change, energy, health care costs and even deficit reduction, all against the backdrop of this fall’s congressional elections.
Dropping penalties on drugmakers for boosting prices on private insurers was a clear setback for Democrats. The decision reduces incentives on pharmaceutical companies to restrain what they charge, increasing costs for patients.
It will also reduce the $288 billion in 10-year savings that the Democrats’ overall drug curbs were estimated to generate — perhaps by tens of billions of dollars, analysts have said.
Even so, the parliamentarian’s ruling left Democrats able to promote the drug provisions as a boon to consumers at a time when voters are infuriated by the worst inflation in four decades.
Senate Finance Committee Chairman Ron Wyden, D-Ore., said that while he was “disappointed” the penalties for higher drug prices for privately insured consumers were dropped, “the legislation nevertheless puts a substantial check on Big Pharma’s ability to price gouge.”
Schumer planned to begin Senate votes on the overall bill later Saturday. The measure faces unanimous Republican opposition, but with the support of Manchin and Sinema, Democrats should be able to muscle the measure through the 50-50 Senate, thanks to Vice President Kamala Harris’ tiebreaking vote.
House passage could come when that chamber returns briefly from recess on Friday.