Centrist Democrats scramble House drug pricing effort

A trio of centrist House Democrats threw their party’s health care agenda into disarray Wednesday by blocking a plan that would have authorized direct government negotiation of drug prices and help pay for a $3.5 trillion social spending bill.

Reps. Scott Peters (D-Calif.), Kathleen Rice (D-N.Y.) and Kurt Schrader (D-Ore.) joined Republicans in voting against leadership-backed drug pricing language at the end of a three-day House Energy and Commerce Committee markup of the sweeping package. The 29-29 tie vote meant the provision could not advance.

While top Democrats believe they can restore the policy later in the legislative process, the public standoff on the House Energy and Commerce Committee underscored the significant hurdles ahead in securing the near-unanimous support Democrats will need to advance the bill.

Energy and Commerce Chair Frank Pallone (D-N.J.) made multiple appeals to the centrists to support the drug pricing language, saying it was essential to negotiating a final package with the Senate.

Pallone also stressed that Democrats were unified in supporting the same drug pricing provision when it first came up for a vote in 2019. Peters previously told POLITICO he supported the bill because he knew it wouldn’t pass the Senate and simply wanted to advance the debate on the issue.

The moderates’ stand could complicate Democrats’ push to reform a slew of federal health programs as part of their $3.5 trillion bill since the drug pricing piece would have generated as much as $700 billion in projected savings over a decade to spend on other health policy priorities.

The vote took place the same day that Speaker Nancy Pelosi and her leadership team asked committee leaders to complete and submit their pieces of the domestic spending bill.

Pelosi spokesperson Henry Connelly reiterated that a provision lowering drug costs “will remain a cornerstone of the Build Back Better Act as work continues between the House, Senate and White House on the final bill.”

Progressive advocacy groups vowed to ramp up the pressure on the holdouts. The drug industry’s big trade group, the Pharmaceutical Research and Manufacturers Association, said the vote “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.”

Now, Democrats are now looking for alternative ways to salvage the policy, including passing it through the Ways and Means Committee, which shares jurisdiction over health policy. The language could also be inserted by the Rules Committee before floor debate on the social spending package.

The moderates have argued the drug pricing plan — which would allow Medicare to bargain down the prices of hundreds of medicines — would hurt innovation in the pharmaceutical industry and has little chance of passing the Senate. Instead, they pushed a narrower plan that would have limited the number of drugs subject to negotiations.

Schrader confirmed to reporters Wednesday morning that he was still a no, saying the committee’s leadership hasn’t been “working on” him as much as the other holdouts. During the markup, he argued the proposal “kills jobs and innovation” and stands no chance of passing the evenly divided Senate.

Peters railed against the leadership-backed plan for imposing “government-dictated prices” on drugs, warning it would “ruin” investment in developing new medications.

Republicans also jumped on Democrats’ internal divisions, repeatedly citing them in the committee debate to argue against drug price negotiation.

But the centrists’ alternative plan is a non-starter with progressives, who see the leadership-backed plan as vital both for fulfilling the party’s promise to lower health costs and pay for priorities like expanding Medicare benefits, adding Medicaid in red states that haven’t expanded their programs and permanently boosting Obamacare subsidies.

Top House Democrats stressed that the fight isn’t over.

The Ways and Means Committee is expected to endorse identical language on drug pricing later Wednesday afternoon. Throughout the week, Democrats on the panel defeated multiple Republican amendments to the policy, including one that would require the HHS secretary to hold off on implementing it until he can certify that the policy would not lead to any drug manufacturing jobs going to China.

Yet, even if it clears that committee hurdle, the policy faces an uncertain future in the House and Senate.

A total of five House Democrats are behind Peters’ alternative proposal, with Reps. Lou Correa (D-Calif.) and Stephanie Murphy (D-Fla.) joining the three Energy and Commerce holdouts.

“This is incredibly hard fought and we’re a long way from the end,” Rep. Peter Welch (D-Vt.), one of the leading proponents of the reform effort, told POLITICO.

Centrist Democrats in the Senate have voiced similar criticisms of the House leadership plan. And the pharmaceutical industry, which had been lobbying and running ads against the effort for weeks, is ramping up its efforts — launching on Wednesday a seven-figure blitz of print and TV ads arguing the bill would threaten their ability to combat future pandemics.

Even supporters of the Medicare price negotiation effort in the upper chamber are acknowledging the tough odds.

“I know the power pharmaceutical companies have. I see it every day in the halls of Congress,” Sen. Amy Klobuchar (D-Mo.) told activists on a call on Tuesday. “You can’t turn around a corner without finding another pharma lobbyist up here.”


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