Centrist Democrats scramble House drug pricing effort

Speaker Nancy Pelosi and her leadership team had spent days working to convince the holdouts, according to people familiar with the push. And Energy and Commerce Chair Frank Pallone (D-N.J.) made multiple public appeals to the centrists to support the drug pricing language during the markup, saying it was essential to negotiating a final agreement with the Senate.

Pallone also noted the three holdouts joined the rest of the party in supporting the same drug pricing provision when it first came up for a vote in 2019. Peters previously told POLITICO he did so because he knew the plan would die in the Senate and just 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 Pelosi and her leadership team asked committee leaders to complete and submit components of the domestic spending bill.

Pelosi spokesperson Henry Connelly stressed 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 also vowed to ramp up the pressure on the holdouts and draw attention to the sizeable donations they’ve received from drug companies.

“It is disgusting when politicians who supported Medicare negotiation in the past switch their votes in exchange for pharma cash,” the group Social Security Works said in a statement Wednesday. “Any politician standing in the way of lower drug prices is on a short path to losing their job,”

Now, Democrats are now looking for alternative ways to salvage the policy, including through the Ways and Means Committee, which shares jurisdiction over health policy and backed the plan on Wednesday. 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 hadn’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 during the committee debate and declaring “Speaker Pelosi’s radical price control scheme for prescription drugs just failed” after the vote.

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 and Medicaid and permanently boosting Obamacare subsidies.

“There are a lot of folks who have ideas about how best to spend the money, but that debate is premature until we know what happens with drug pricing and how much we are working with,” Rep. Peter Welch (D-Vt.), one of the leading proponents of the reform effort, told POLITICO. “There’s no question that as we proceed on the elements of this package the differences that exist within the caucus will have to be resolved, and I hope all of us remember that our only pathway to success is unity.”

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

The Ways and Means Committee approved identical language on drug pricing later Wednesday afternoon in a largely party line 24-19 vote. Only Rep. Stephanie Murphy (D-Fla.) joined Republicans in voting against the measure.

Throughout the week, Democrats on the Ways and Means 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 Murphy and Rep. Lou Correa (D-Calif.) joining the three Energy and Commerce holdouts.

“On the one hand we have united opposition from Republicans, and on the other we have overwhelming support from Democrats but it’s not unanimous. That’s the reality we’re in. ” said Welch. “We’re dealing with a threadbare majority, which increases our challenges.”

The policy also faces hurdles in the upper chamber, where a handful of Senate Democrats have voiced criticisms of the scope of Pelosi’s drug 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. 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.”

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-Minn.) told activists on a call on Tuesday. “You can’t turn around a corner without finding another pharma lobbyist up here.”