Democrats miss a key piece of the health agenda in spending

Yet the plan will now move forward without a provision that would penalize drug manufacturers for faster cost increases than inflation in private insurance plans and Medicare.

The exclusion of private insurance price caps means there is little left that will reduce costs for the vast majority of Americans who receive health insurance through their private sector employer. Democrats are still waiting for a separate parliamentary decision on their policy to limit the cost of insulin both inside and outside Medicare.

The decision also means tens of billions in federal savings on the overall bill, a potential threat to Democrats’ hopes of offsetting the cost of supporting Obamacare subsidies.

However, Democrats say the bill will move forward in the next few weeks with its most important provision intact: the repeal of the long-standing ban on the federal government from directly negotiating drug prices with pharmaceutical companies.

Senate Majority Leader Chuck Schumer called the lawmaker’s ruling “good news” in a statement Saturday.

“Medicare will finally be allowed to negotiate prescription drug prices, seniors will have free vaccines and their costs will be limited and more,” he said.

Representative Peter Welch (D-Vt.), A key negotiator on the House version of the bill, said the provision “would break the iron curtain that Big Pharma has maintained against drug price negotiation, and this is changing the game. If it passes, Pharma will not be able to continuously attach it to the consumer at will. And this is especially important with people pounding inflation at the pump and at the grocery store. “

But Welch, who runs to replace retired Senator Patrick Leahy (D-Vt.), Acknowledged that the MP’s ruling is still a big win for the pharmaceutical industry.

“Essentially it would mean that pharmaceutical companies could push price hikes well beyond inflation,” he said in an interview in the days leading up to the vote.

Pharmaceutical companies and Senate Republicans had been planning for months to target the inflation ceiling arrangement, through a process known on Capitol Hill as a “Byrd’s bath.” Senator Mike Crapo (R-Idaho), the top Republican on the Senate Finance Committee, told reporters that he reviewed the bill “line by line” in an attempt to bring any challenge they could find.

Democrats who have pushed politics for years were confident it could pass under the Senate’s strict reconciliation rules, which limit the types of bills that can pass with a simple majority. Only proposals that are primarily related to federal spending or revenue can fly, but not those that make major political changes and only have an “incidental” impact on the federal budget.

Democrats have argued that the bill needs inflation caps for drug prices across the board to work, warning that otherwise pharmaceutical companies can raise prices even higher for people with private insurance to compensate. what they lose from the cost controls the bill still imposes on Medicare.

Senator Chris Murphy (D-Conn.) Said such points are “normally the kind of argument that convinces the MP”.

“You can’t untangle the private sector from the public sector – one doesn’t work without the other,” he said.

Proponents of the provision also pointed to last year’s Congressional Budget Office conclusion that the inflation limits provision would save the government about $ 80 billion. Over a decade to argue that it should be allowed to remain in the account.

Yet reconciliation experts and industry insiders were equally confident that the provision would be dropped from the package.

“Many people think that if something gets a significant CBO score, it can’t be considered incidental, but it’s more about whether the political implications outweigh the budgetary implications,” said Stephen Northrup, a lobbyist who previously served as head of the health policy Director of the Senate Commission for Health, Education, Work and Pensions. “If the inflation cap were limited to Medicare, a very direct relationship could be drawn between the policy and the score. But when you extend it to the commercial market, the relationship becomes more tenuous. You seem to be looking less to save money than to extend a policy that has an impact beyond the federal budget. “

Democrats currently don’t have a back-up plan for the policy, though some advocates are now pushing to try to apply inflation limits to other federal insurance programs like Medicaid and federal employee insurance.

Even if they are able to do so, progressives who originally pushed for much broader drug price controls are disappointed that their already watered-down plan has gotten even weaker over the past year.

Senate Finance President Ron Wyden (D-Ore.), Who worked for months creating the drug pricing language and wrangling votes to approve it, blamed the pharmaceutical industry’s influence on Capitol Hill for end of the provision of the inflation ceiling.

“Special interests are always working against us to get relief from hard-hit Americans, especially the elderly,” he told POLITICO before the lawmaker’s ruling. “So what a surprise that special interests – and you’ve seen the numbers on how many lobbyists they have – are trying to protect their profits.”