WASHINGTON — After years of promises and months of negotiations, Democrats appear to be on the verge of prescription drug reform.
Sen. Joe Manchin (D-WV) announced he had reached a deal with Democratic leadership to enact sweeping reforms involving health care, the climate and taxes. Manchin previously blocked efforts to enact similar legislation last year. One of the most consequential changes involves prescription drugs.
The newly released legislation caps out-of-pocket costs for those with Medicare Part D at $2,000 annually. The legislation also enacts penalties for companies that raise prices above inflation.
Perhaps most importantly, the proposal would allow Medicare to negotiate with prescription drug companies for the very first time.
A catch
Like most things in Washington, there is a catch. Recipients on Medicare would not benefit from the newly-allowed negotiation with prescription drug companies until 2026. Only 10 drugs would be selected for negotiation at first, with more drugs becoming eligible in subsequent years.
Between now and then, the program would be set up. The legislation may also not impact the price of drugs when they first enter the market.
That could allow pharmaceutical companies to set a higher price initially, knowing that future price hikes would be unlikely.
What's next
This bill is already being met with opposition from Republicans in the Senate. Republican leadership has concerns about proposed tax increases in the bill and how restrictions on pharmaceutical companies could impact future research on new drugs.
However, support from the GOP may not be needed. If every Democratic senator supports the bill, it will pass the Senate because of leadership attempts to pass it via reconciliation. Reconciliation is the Senate procedure that allows some financial bills to advance with a simple majority vote. Normal rules require 60 votes to defeat the filibuster in the Senate.
A vote could happen next week with the legislation needing a vote in the House.
Passing bills in the House can be easier than in the Senate. Still, Speaker Nancy Pelosi has a slim majority, and any member of Congress could, in theory, impact the legislation's chances of becoming law.
