Democrats lose a key piece of the health agenda in the spending bill

However, the plan will now move forward without a provision that would have penalized drugmakers for raising costs faster than inflation in private insurance plans and in Medicare.

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

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

Still, Democrats argue that the bill will move forward in the coming weeks with its most important provision intact: repealing the longstanding ban on the federal government directly negotiating drug prices with drug companies.

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

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

Rep. Peter Welch (D-Vt.), a key negotiator on the House version of the bill, said the provision “would break through the iron curtain Big Pharma has held against negotiating drug prices, and that changes the rules of the game. If it happens, Pharma will not be able to continuously adhere to the consumer at his will and whim. And that’s especially important with inflation hitting people at the pump and at the grocery store.”

But Welch, who is running to replace the retiring senator. patrick leah (D-Vt.), acknowledged that the parliamentarian’s ruling remains a great victory for the pharmaceutical industry.

“Essentially it would mean that pharmaceutical companies could increase price increases well beyond inflation,” he said in an interview in the days before the vote.

Pharmaceutical companies and Senate Republicans had planned for months to target the provision of inflation caps, through a process known on Capitol Hill as a “Byrd bath.” Senator Mike Crapo (R-Idaho), the top Republican on the Senate Finance Committee, told reporters they went through the bill “line by line” in an effort to present as many challenges as they could find.

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

Democrats argued the bill needs inflation caps on drug prices across the board in order to work, warning that failure to do so could lead drug companies to raise prices even higher for people with private insurance to compensate what they lose for the cost. controls that the bill still imposes on Medicare.

Senator chris murphy (D-Conn.) said such points are “usually the kind of argument that is persuasive with the parliamentarian.”

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

Supporters of the provision also pointed to the finding by the Congressional Budget Office last year that the inflation cap provision would save the government about $80 billion. on a decade to argue that it should stay on the bill.

However, reconciliation experts and industry members were equally certain that the provision would be removed from the package.

“A lot of people think that if something gets a significant CBO score, it can’t be considered incidental, it’s more about whether the political implications outweigh the budgetary ones,” said Stephen Northrup, a lobbyist who previously worked as a health policy maker. director of the Senate Committee on Health, Education, Labor and Pensions. “If the inflation limit were limited to Medicare, a very direct relationship could be established between the policy and the score. But when you extend it to the commercial market, the relationship becomes more tenuous. It seems less like he’s trying to save money than trying to extend a policy that has an impact beyond the federal budget.”

Democrats currently have no backing plan for the policy, though some advocates are now pushing to try to put inflation caps on other federal insurance programs like Medicaid and insurance for federal employees.

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.

President of the Finance Senate Ron Wyden (D-Ore.), who worked for months crafting drug pricing language and discussing the votes to pass it, blamed pharmaceutical industry influence on Capitol Hill for the demise of the drug pricing provision. inflation.

“Special interests always work against us getting help for hard-hit Americans, particularly older people,” he told POLITICO before the congressman’s ruling. “So what a surprise that the special interests, and you’ve seen the numbers on how many lobbyists they have, are trying to protect their profits.”

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