Senate Dems try to mend fences over drug price reform divide as moderates seek slimmed-down proposal

Capitol building in Washington
Senate Democrats are trying to assuage concerns of moderates over how far to go on giving Medicare the power to negotiate for lower drug prices. (Photo by rarrarorro/iStock/Getty Images Plus/Getty Images)

Top Senate Democrats are seeking to assuage concerns from moderates over the extent of their drug price reforms, as senators want more input from pharma over how far to go with giving Medicare the power to negotiate lower drug prices.

Moderate Democrats have expressed major concerns with the party’s effort to give Medicare sweeping authority to negotiate for lower drug prices and force manufacturers to apply those prices to commercial plans. Talks over drug price reforms have heated up as Congress moves toward voting this fall on a $3.5 trillion infrastructure package expected to include such legislation.

“Senators feel there is a path out there,” said Sen. Ron Wyden, D-Oregon, of drug price reform. “There is a way to get this done in a way that as I characterize it consumers don’t get mugged at the pharmacy counter and you have a clear path to promoting innovation in biotech and the kind of cures people want.”

The remarks come less than a week after three centrist Democrats voted against a drug negotiation policy in a legislative markup by the House Energy and Commerce Committee. Politico also reported Monday that Sen. Kyrsten Sinema, D-Arizona, is opposed to any drug price bill that includes Medicare negotiation authority.

President Joe Biden is meeting Wednesday with a collection of moderate and progressive House and Senate lawmakers over concerns on the package, according to a report in The Washington Post.

Wyden, who has been pressing for drug price reforms for years, appeared to give flexibility on a key part of the debate over Medicare drug price negotiation authority: providing the negotiated prices to commercial plans.

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He told reporters that the private sector may already try to get the negotiated Medicare prices for their health plans.

“When Medicare, the flagship federal program, takes action … there is a big push in the private sector to get the same kind of arrangements,” he said. This push could happen “even apart from any kind of statutory provision.”

Wyden is the chairman of the Senate Finance Committee, which is expected to draft the drug pricing provisions of the $3.5 trillion package.

The remarks come less than a week after Reps. Kurt Schrader, D-Oregon, and Scott Peters, D-California, unveiled their own proposal that gives Medicare drug pricing negotiation authority, but only for certain Part B drugs that no longer have market exclusivity and no competition. The bill would also not require insurers to apply the Medicare negotiated price to commercial plans.

The legislation goes far beyond HR 3, a bill that House Democrats reintroduced earlier this year that enables Medicare to negotiate for a lower price for up to 250 drugs per year in Part D. The list would be made up of the costliest drugs that don’t face competition.  

HR 3 would also create a maximum price for any negotiated drug based on the international price index.

Wyden said he hasn’t spoken with the House moderates about their concerns.

“I will let them speak for themselves,” he said.

Democrats can't afford any defections as they seek to pass the $3.5 trillion package through a procedural move called reconciliation that enables budget bills to pass the Senate via a simple majority and bypass a legislative filibuster. Democrats in the House have a slim three-seat majority and a 50-50 margin in the Senate with Vice President Kamala Harris breaking any tie.

A seat at the table

Moderate Senate Democrats have also called for the pharmaceutical industry to be more involved in talks.

“The pharmaceutical folks have to be at the table,” said Sen. Tom Carper, D-Delaware. “There is going to be a number that the pharma industry needs to contribute to actually pay for stuff. The number is not going to be $600 billion. It is not going to be zero either.”

He was referring to the $600 billion in savings that Medicare drug price negotiation authority could generate for the $3.5 trillion package.

The nonpartisan legislative scorekeeper Congressional Budget Office estimated last year that HR 3 could lower federal spending by $581 billion through 2030.

RELATED: Biden directs Congress to give Medicare broad authority to negotiate for lower drug prices

Carper said there will be some kind of Medicare pricing and negotiation authority but that “the industry needs to be at the table trying to figure out what makes sense.”

“We have an incredible pharmaceutical industry,” said Carper. “We want to make sure at the end of the day we don’t take away the incentives for innovation.”

The pharmaceutical industry group Pharmaceutical Research and Manufacturers of America has been vehemently opposed to any type of negotiation and instead calls for reforms to the insurance industry and to the 340B drug discount program that requires manufacturers to offer discounts to safety net providers in exchange for participation in Medicare and Medicaid.

But some in the industry talked glowingly about the narrower package endorsed by Peters and Schrader. A collection of biotech startup investors said during a briefing last week that the legislation is a move in the right direction.

But while Wyden seeks to assuage moderates, he must also face progressives eager to combat high drug prices and go further with negotiation authority.

“We have got to do what the American people want,” said Sen. Bernie Sanders, I-Vermont, in response to a question from reporters earlier this week on whether he is willing to negotiate with moderates. “That is, substantially, have Medicare negotiate prescription drug prices.”