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Senate lawmakers agree to Dems’ higher drug price controls

WASHINGTON (AP) — Senate lawmakers dealt a blow Saturday to Democrats’ plan to curb drug prices but left the rest of President Joe Biden’s sweeping economic bill largely intact as party leaders prepare for first votes on President Joe Biden’s lofty domestic package. goals.

Elizabeth McDonough, the chamber’s nonpartisan rules arbitrator, said lawmakers should remove language that imposes hefty fines on drugmakers who raise their prices beyond inflation in the private insurance market. It’s the bill’s main cost protection for about 180 million people whose health care comes from private insurance, purchased through work or on their own.

Other key provisions were left intact, including giving Medicare the power to negotiate payments for drugs for its 64 million elderly recipients, a longtime goal of Democrats. Penalties on manufacturers that exceed inflation apply to drugs sold to Medicare, and there is a $2,000 annual out-of-pocket limit on drug costs and free vaccines for Medicare beneficiaries.

Their rulings come as Democrats plan to begin Senate votes Saturday on their wide-ranging package that addresses climate change, energy, health care costs, taxes and deficit reduction. Party leaders said they believe they have the unity to move the legislation through the 50-50 Senate, thanks to Vice President Kamala Harris’s tie-breaking vote and solid Republican opposition.

“This is an important victory for the American people,” Senate Majority Leader Chuck Schumer, D-N.Y., said of the bill, which both parties have used in four of their election-year campaigns to assign blame for the worst period of inflation. decades. “And a sad commentary on the Republican Party, who actively fights provisions that cost less money to the American family.”

In response, Senate Minority Leader Mitch McConnell, R-Ky., said Democrats were “misreading the outrage of the American people as a mandate for yet another reckless tax and spending spree.” Democrats “have already robbed American families once through inflation, and now their solution is to rob American families a second time,” he said.

Dropping fines on drugmakers would reduce incentives for pharmaceutical companies to curb the fees they charge, raising costs for patients.

Deleting that language would cut $288 billion in 10-year savings from what Democrats estimate the overall drug curbs would generate — possibly tens of billions of dollars in cuts, analysts said.

Schumer said McDonough’s decision to cap private insurance prices was “an unfortunate decision.” But the remaining drug pricing language represents “a major victory for the American people,” and the overall bill “remains largely intact,” he said.

The ruling followed a 10-day period in which Democrats resurrected key elements of Biden’s agenda that had seemed dead. In rapid-fire deals with two of the Democrats’ most unpredictable senators — first conservative Joe Manchin of West Virginia, then Arizona centrist Kirsten Sinema — Schumer put together a broad package, but one part of earlier big versions that Manchin derailed. The party is an achievement in the wake of the Congress elections this fall.

MPs signed off on a charge on excess emissions of methane, a powerful greenhouse gas contributor from oil and gas drilling. They allow environmental grants to stand up for minority communities and other initiatives to reduce carbon emissions, said Senate Environment and Public Works Committee Chairman Thomas Carper, D-Del.

He approved a provision that would require energy efficiency projects to pay union-level wages to qualify for tax credits and would limit electric vehicle tax credits to cars and trucks assembled in the United States.

The overall measure faces unanimous Republican opposition. But Democrats will be able to muscle the measure through the Senate, as they fight back against nonstop “vote-a-rama” amendments — designed by Republicans to derail the measure.

House passage could come when that chamber briefly returns from recess on Friday.

“What is Vote-a-Rama like? It’s going to be hell,” said South Carolina Sen. Lindsey Graham, the top Republican on the Senate Budget Committee, said Friday about the impending GOP amendments. In their support of the Democratic bill, Manchin and Sinema are “empowering legislation that makes life more difficult for the average person” by driving up energy costs with tax increases and making it harder for companies to hire workers.

The bill offers spending and tax incentives to move toward cleaner fuels and supports coal with help to reduce carbon emissions. Subsidies to help millions afford private insurance premiums will be extended for three years, and there is $4 billion to help western states deal with drought.

There will be a new 15% minimum tax on certain corporations that make more than $1 billion annually but pay less than the current 21% corporate tax. There would be a 1% tax on companies buying back their own stock, after Cinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget is pumped to bolster its tax collections.

While the final cost of the bill is still being determined, analysts say it would spend more than $300 billion over 10 years overall to slow climate change, the nation’s largest investment in that effort, and billions more on health care. It would raise more than $700 billion in taxes and government drug spending savings, leaving about $300 billion for deficit reduction — a modest reduction in projected 10-year deficits of several trillion dollars.

Democrats are using special procedures that allow the measure to pass without reaching the 60-vote majority normally required for legislation in the Senate.

It is the MPs’ job to decide whether to drop parts of the legislation for violating those rules, in which provisions must be aimed primarily at affecting the federal budget, not imposing new policy.

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Associated Press writer Matthew Daly contributed to this report.

Copyright 2022 Associated Press. All rights reserved.

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