Democrats are reportedly considering using budget reconciliation to allow Medicare to negotiate prescription drug costs.
The pharmaceutical industry is reportedly unhappy that congressional Democrats may soon rein in high prescription drug costs — and unlike in the last Congress, their ally Sen. Mitch McConnell (R-KY) will be unable to block the action.
Politico reported on Tuesday that several drug industry lobbyists are concerned that the Democratic majorities in the House and Senate may pass long-stalled legislation to allow Medicare to negotiate for lower prices by purchasing commonly used items in bulk.
"Something is coming. We're just not sure when," one unnamed lobbyist source told the outlet. Others said they were worried that by reducing the government's payments to the industry, it might effectively be the "piggy bank" that funds new infrastructure spending.
They signaled hope that they might sway moderate Democrats to weaken any anti-industry changes.
Their worries come as Senate Budget Committee Chair Bernie Sanders is reportedly planning to take advantage of a rule that allows some budgetary legislation to be passed with just a simple majority — bypassing a possible GOP minority filibuster to enact legislation to lower drug costs. That process, known as budget reconciliation, was used earlier this month to pass President Joe Biden's $1.9 trillion American Rescue Plan without a single Republican vote.
In 2019, the Democratic majority in the House of Representatives passed the Elijah E. Cummings Lower Drug Costs Now Act — a bill to lower the costs of treatments for cancer, asthma, diabetes, and many other medical conditions — on a mostly party line vote. It would have allowed the government negotiate Medicare prescription drug costs, limited out-of-pocket expenses for beneficiaries, and restricted future drug price increases.
Several House Republicans who had run on a promise to support similar legislation voted against it. They and other GOP lawmakers echoed industry talking points that if pharmaceutical companies saw a drop in their massive profits, they would do less research and development for future therapeutics.
But the Congressional Budget Office estimated that it might mean just 30 fewer drugs on the market over the next 20 years — while reducing the federal budget deficit by about $5 billion over a decade.
"Socialist price controls will do a lot of left-wing damage to the healthcare system. And of course we're not going to be calling up a bill like that," he told reporters in September 2019.
Shortly after that announcement, McConnell received an influx of $50,000 in pharma money for his own reelection campaign, though several of his donors denied any connection between those events.
While McConnell won reelection in his own race, his party lost a net three Senate seats and his majority. Senate Majority Leader Chuck Schumer of New York now has the power to determine which bills come to the floor and, assuming all Democrats back a budget bill with the drug price provisions included, Republicans would be powerless to stop it.
Donald Trump actually ran on a similar proposal in 2016, saying negotiations with pharmaceutical companies would "save $300 billion" each year. "We don't do it. Why? Because of the drug companies," he argued.
After taking office, he abandoned this promise and his administration vowed to veto the legislation if passed.
Most Americans back the Democrats' proposals. A 2019 Kaiser Family Foundation poll found 86% support for letting the federal government negotiate with drug companies to get a lower price for Medicare participants' medications.
Published with permission of The American Independent Foundation.