Drug plan fails, signaling thorny path for Democrats’ $3.5 trillion bill
By Emily Cochrane and Margot Sanger-Katz
A Democratic plan to lower prescription drug prices as part of the party’s $3.5 trillion social policy package failed in a House committee earlier this week after moderates refused to support it, highlighting internal divisions that could complicate the legislation’s path to enactment.
Three Democrats — Reps. Scott Peters of California, Kurt Schrader of Oregon and Kathleen Rice of New York — joined Republicans on the House Energy and Commerce Committee in voting against the drug proposal, which is fiercely opposed by the pharmaceutical industry. Their opposition resulted in a tie that effectively blocked the plan from advancing out of that panel.
An identical provision later cleared the House Ways and Means Committee, which also has jurisdiction over the drug pricing measure, a crucial source of revenue to finance the far-reaching bill.
But the defeat reflected the many disputes among Democrats that are threatening to derail or scale back their domestic policy plan. And it illustrated the challenges that Speaker Nancy Pelosi of California and other party leaders face in uniting their slim majorities around legislation that represents President Joe Biden’s best chance of accomplishing key parts of his agenda.
“The president agrees with Speaker Pelosi that in order to build an economy that delivers for the middle class and working families — not just those at the top — it is critical for us to empower Medicare to directly negotiate for lower drug prices,” said Andrew Bates, a spokesman for the White House.
The setback came on a day when Biden was meeting separately with two Democratic holdouts to the social policy package, Sens. Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, both of whom have balked at the legislation’s price tag.
Unity on the measure, branded the “Build Back Better Act,” is crucial given that Republicans are unanimously opposed. Democrats plan to push the plan through under a special budget process known as reconciliation, which shields it from a filibuster and allows it to pass on a simple majority vote. But given their slim majorities, Democrats cannot afford even one defection in the 50-50 Senate and can spare as few as three votes in the House.
Committee work formally concluded in the House on Wednesday, as the Ways and Means Committee barreled through a final round of votes before advancing the prescription drug provision, a series of tax increases on wealthy people and corporations, and tax relief for families. Only one Democrat, Rep. Stephanie Murphy of Florida, joined Republicans on that panel in voting against the measure.
“I remain optimistic that the comprehensive reconciliation package will be appropriately targeted and fiscally responsible — paid for by tax provisions that promote fairness but do not hurt working families,” Murphy said in a statement after the vote. “Every moment we spend debating provisions that will never become law is a moment wasted and will delay much-needed assistance to the American people.”
Final passage remains far from guaranteed. Democrats in both chambers need to reconcile competing plans for financing the package and divisions over how to structure key components, most likely before the legislation reaches the House floor. It is possible that additional provisions will be added, including a push from some lawmakers to address the cap on the deduction for state and local taxes.
Pelosi has pledged to iron out differences with the Senate before holding a floor vote, and the drug provision remains one of the thorniest issues for leaders to resolve. While the Ways and Means Committee vote kept it in the package for now, the defections on the Energy and Commerce panel signaled that it would most likely need to change in order for the entire bill to become law.
“There is no excuse for every Democrat not supporting it,” Sen. Bernie Sanders, I-Vt., chair of the Budget Committee, said in a statement. “Now is the time for Congress to show courage and stand up to the greed of the pharmaceutical industry. The American people will not accept surrender.”
The drug pricing provision is a major policy priority for congressional leaders and the White House. High drug prices are a major consumer issue and a top voter concern. All three of the holdouts voted for nearly identical legislation when it passed the House in 2019.
“Polling consistently shows immense bipartisan support for Democrats’ drug price negotiation legislation,” Henry Connelly, a spokesman for Pelosi, said in a statement after the vote. “Delivering lower drug costs is a top priority of the American people and will remain a cornerstone of the Build Back Better Act as work continues between the House, Senate and White House on the final bill.”
During the Energy and Commerce hearing Wednesday, Rep. Frank Pallone Jr., D-N.J., the committee chair, urged his colleagues to vote to advance the bill, pledging “that your voices will be heard either with a seat at the table or through me.”
The moderates were unmoved, though they refrained from forcing a vote on their own drug pricing alternative. Schrader said he hoped “this is genuinely the beginning of a conversation on drug pricing policy that can actually be signed into law.”
The House provision would establish aggressive price caps for certain prescription drugs, tying the government’s price for medicines to the those paid in other countries. The Congressional Budget Office estimated that the policy would result in prices for certain drugs falling by more than half. Under the legislation, that lower cost would be made available to other drug buyers in the country, reducing prices for employer and individual health plans, too. A 2019 estimate of similar legislation found that it would save the federal government more than $450 billion over a decade.
The pharmaceutical industry strongly opposes such policies, which could substantially reduce its revenues. Just hours before the vote, PhRMA, the industry trade group, announced a seven-figure television ad purchase devised to stave off price regulation. A large group of industry chief executives also released an open letter opposing the bill. It appeared as a paid ad on Wednesday in The Washington Post, Politico and The Hill.
“These concerns have been known for months, yet they’ve been ignored by House leaders,” said Debra DeShong, the group’s executive vice president for public affairs. “This should be a strong signal to the House leadership that there is broad support for lowering costs for patients without sacrificing access to new cures and treatments.”