House Democratic leaders amended their signature government drug price negotiation bill on Tuesday to eventually require drugmakers to pay back private healthcare plans if they raise drug prices faster than inflation and to include more drugs in negotiations with the HHS secretary.
The Congressional Progressive Caucus pushed for the changes, and some members threatened to vote against the bill if their demands were not met. The inflationary rebate provision was offered by Progressive Caucus Co-Chair Pramila Jayapal (D-Wash.) and adopted in the Education & Labor Committee markup on the Elijah Cummings Lower Drug Costs Now Act, but leadership had watered it down.
The earlier version of House Democrats' bill would have required drugmakers to pay back Medicare if they raised drug prices faster than inflation. The new provisions would require the Labor secretary to issue rules that would expand the inflationary rebates to private healthcare plans.
The HHS secretary would also ultimately be obligated to negotiate the prices of at least 50 high-cost drugs with little or no competition per year, up from the original 35.
"This is a huge win, and it shows what we can do when we stick together and all push hard for the American people," Jayapal said in a statement.
House leadership's concessions on Tuesday were only the latest in a series of capitulations to the Progressive Caucus in earlier stages of drafting the legislation. In response to progressive complaints, House Democratic leaders previously changed the main cost-saving mechanism in the bill from arbitration to direct negotiation and expanded negotiation-eligible drugs to include medications with one generic or biosimilar competitor.
"The improvements agreed upon this afternoon, coupled with changes made earlier this year, have made this bill significantly stronger for the American people. Our goal has always been to expand the scope of this legislation so more families could benefit from lower drug prices," the Progressive Caucus said in a statement on Tuesday.
Pelosi's bill is expected to pass the House, but Senate Majority Leader Mitch McConnell (R-Ky.) said the measure will not get a vote in the Senate. The White House said in a statement Tuesday that President Donald Trump would veto Pelosi's bill if Congress passed it, further dimming the legislation's prospects.
Even after the veto threat, House Energy & Commerce Chair Frank Pallone (D-N.J.) said Tuesday that Democratic leaders are still holding out hope that Trump will flip and support House Democrats' legislation.
Trump expressed support for allowing HHS to negotiate drug prices on the campaign trail and has outlined his own plan to use foreign reference pricing to lower drug costs for physician-administered drugs in Medicare. Both policies are foundational policies in House Democrats' drug-pricing package.
"We're hopeful that he will eventually come back to supporting what he said he would support— negotiated prices," Pallone said.
A floor vote on House Democrats' bill, dubbed H.R. 3, is expected on Thursday. House Democratic leadership had previously delayed a floor vote on their drug-pricing package because they were waiting on final score from the Congressional Budget Office, which was issued on Tuesday.
The CBO estimated House Democrats' bill would save more than $500 billion. Analysts estimated House leaders would have $5 billion left over even after adding dental, vision and hearing benefits to traditional Medicare and funding a variety of other healthcare initiatives. Democratic leaders said they would use the leftovers for deficit reduction.
The CBO's controversial estimate on pharmaceutical innovation impact is that the bill's passage could lead to eight fewer drugs being brought to market in the United States over the next 10 years, and 30 fewer drugs over the subsequent decade.
While Pelosi's bill is barreling forward, Republicans still got a win on Tuesday night when the House Rules Committee agreed to allow a House floor vote on a drug-pricing bill pushed by House Republican leaders.
House Rules Committee Ranking Republican Tom Cole of Oklahoma on Tuesday thanked Rules Committee Chair Jim McGovern (D-Mass.) for allowing the bill to come to a floor vote as an amendment to House Democrats' bill.
"That was our number one ask, and that was a very generous thing for you to do," Cole said.
The House GOP drug-pricing package is composed of a hodgepodge of provisions that have received bipartisan support, though the bill currently does not have any Democratic co-sponsors.
The White House said in a statement that the House GOP legislation is a "far better approach to lowering drug prices and discovering life-saving and sustaining medicines" than House Democrats' bill, though the administration also reaffirmed its support for a drug-pricing package authored by Senate Finance Chair Chuck Grassley (R-Iowa) and Ranking Democrat Ron Wyden of Oregon.