House Democrats passed Speaker Nancy Pelosi’s sweeping legislation Thursday to lower the cost of prescription drugs on a largely party-line vote — a bill that will almost certainly not become law but moves the Democrats a step closer to their longtime goal to negotiate Medicare drug prices and address voters’ concerns over rising health costs.
But the measure, which would allow the government to negotiate lower prices for up to 250 prescription drugs in Medicare, will be a key plank in Democratic efforts to maintain control of the House of Representatives in 2020. The Democratic Congressional Campaign Committee said it planned to target ads to voters in swing districts and those currently held by vulnerable Republicans after the vote.
It is also a marker for how Democrats would address rising prescription drug prices if they were to gain control of the White House and Congress. In addition, Democrats are seeking to highlight Trump’s failure to deliver on his 2016 campaign promise to allow Medicare to “negotiate like crazy.”
The Democrats’ effort, which became broader as it made its way through committees, has spooked the pharmaceutical industry, which is vehemently opposed to the legislation and has said it would stifle innovation.
A Congressional Budget Office estimate showed the bill, H.R. 3, named the Elijah E. Cummings Lower Drug Costs Now Act after the late Democratic congressman, would save the government $456 billion between 2020 and 2029, and result in eight fewer new drugs coming to market over the next decade. Some Democrats have argued the bill would simply result in fewer copycat versions of existing drugs, rather than prevent development of new ones, but drug lobbyists argue the worst damage would extend beyond the first decade of the law’s implementation.
“The American people are fed up with paying three, four or 10 times more than people in other countries for the exact same drug,” said Rep. Frank Pallone Jr. (D-N.J.), chairman of the Energy and Commerce Committee. “I now hope Senator McConnell will follow through on President Trump’s repeated promises to ‘negotiate like crazy’ and take up this bill. We cannot afford to wait.”
But Trump backed off the House proposal in recent weeks, saying Congress should focus its efforts on a bipartisan Senate Finance Committee proposal from Chairman Charles E. Grassley (R-Iowa) and ranking Democrat Ron Wyden (Ore.) that would cap price increases in Medicare to the rate of inflation and limit seniors’ out-of-pocket costs. That bill is also unlikely to be signed into law — Senate Majority Leader Mitch McConnell (R-Ky.) told the White House he is unwilling to bring up a bill that splits his caucus, and several Republicans have said the measure is akin to imposing price controls, which they have long opposed.
The House bill would require the Health and Human Services secretary to negotiate the prices of up to 250 drugs in Medicare each year that do not have competitors and would impose severe financial penalties on drug companies that failed to come to an agreement. The negotiated prices would be available to those covered by private insurance, not just Medicare beneficiaries. The bill also establishes an international pricing index that would ensure U.S. consumers do not pay more than beneficiaries in other countries, where prices are often lower because their governments negotiate prices. That is similar to a more limited proposal by the Trump administration that is making its way through the rulemaking process but has been stalled amid technical and regulatory issues and the president’s changing demands.
The CBO also found that the House bill would lower health insurance costs for employers and increase federal revenue by about $45 billion because employer insurance premiums would decline, and those savings would manifest in increased taxable wages.
Progressives had threatened to derail the effort earlier this week over complaints that the bill did not go far enough, but Pelosi managed to hold her party together. Republicans railed against the bill, declaring it a socialist proposal that would threaten innovation. Days ahead of Thursday’s vote, they introduced their own drug pricing proposal, which Pelosi and Democrats dismissed as too incremental.
“Our plan to lower out of pocket spending and protect access to new medicines and cures is not controversial,” four top House Republicans said in a statement. “The American people need relief and we ought to deliver it by moving forward with legislation that can actually be signed into law.”