As we explained last week, the parameters of whatever new health care legislation is passed by Congress this year have been laid out by the Democratic majorities in both houses of Congress. We cover these Democratic proposals because they hold the majorities in Congress (although very narrow majorities) and therefore they set the agenda just as Republicans did when they held the majorities.
According to Bloomberg News, the Democrats’ ambitious plans to add new benefits to Medicare and improve other health care benefits this year hinge on delivering a major drug pricing package.
Democrats in the Senate are working on passing a $3.5 trillion legislative package that includes their main health care priorities through a budget process known as “reconciliation” that will allow them to pass it without Republican support since they don’t expect any Republicans to support the legislation. The multi-trillion-dollar legislative package could include expanding Medicare and Medicaid as well as extending enhanced insurance subsidies for people on the Affordable Care Act’s exchanges.
To offset at least some of the cost, lawmakers have proposed authorizing the government to negotiate with drug makers, as well as other changes to lower the price of medicines. But a failure to win big on drug pricing means Democrats won’t deliver much of their promised health agenda, lawmakers say.
However, their first problem is coming up with legislation that all Democrats will support, and they are not there yet.
Sen. Bob Menendez (D-N.J.) has said that in discussions with colleagues he’s made clear he’ll judge any drug pricing legislation by what it saves consumers, not by what it could potentially buy lawmakers.
“My whole focus on the question of prescription drugs has been: how do we ensure that the consumer pays lower prices,” he said. “Saving the government is one thing, but that does nothing at the end of the day to help the consumer at the counter.”
Menendez, who represents a state that’s home to pharmaceutical giants, has voted against drug price negotiation legislation in the past but didn’t rule out supporting it in the future. He recently introduced a bill with Sen. Bill Cassidy (R-La.) to cap what seniors in Medicare pay for medicines each year.
That legislation would alter how Medicare, insurers, and drug makers split the cost of paying for drugs once beneficiaries hit their annual limit, putting more of the cost onto industry. This shift is meant to encourage insurers to pressure drug makers to lower their prices overall.
CBO estimated that a similar redesign of Medicare’s prescription drug benefit, where out-of-pocket costs are capped and insurers are pushed to negotiate for better deals, would save the government $3.39 billion.
Meanwhile Senate Finance Chairman Ron Wyden (D-Ore.) said he wants to pass a government negotiation bill that includes a slate of other drug pricing items.
His job this summer is to win over his colleagues and find common ground.
“I’m going to spend day after day this summer working on these discussions,” Wyden said.