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Senate lawmakers agree to Dems’ higher drug price controls

WASHINGTON (AP) — Senate lawmakers narrowed Democrats’ plan to curb drug prices but largely left it intact Saturday, Democrats said, as party leaders began moving their sweeping economic bill through the chamber.

Elizabeth McDonough, the chamber’s rules arbitrator, gave the green light to clean air provisions in the measure, including limiting electric vehicle tax credits to those assembled in the US, Democrats said.

The nonpartisan official’s rulings came 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 now believe they have the unity to push the legislation through the Senate 50-50 with Vice President Kamala Harris’ tie-breaking vote.

McDonough said provisions forcing drugmakers to pay rebates if the prices of products sold to private insurers rise above inflation should be eliminated. Pharmaceutical companies have to pay those penalties, however, if the prices of the drugs Medicare buys go up too much.

Dropping penalties on drugmakers for raising prices on private insurers is a clear setback for Democrats. The decision reduces the incentive for pharmaceutical companies to limit the fees they charge, increasing 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. But other restrictions on rising drug costs remain, including allowing Medicare to negotiate the cost of drugs it buys, limiting seniors’ out-of-pocket costs and providing free vaccines.

Democrats touted the drug language as a boon to consumers at a time when voters are angered by the worst inflation in four decades and the remaining prescription drugs.

“This is an important victory for the American people,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement. “Despite the unfortunate verdict that the inflation rebate is more limited in scope, the overall program remains intact and we are one step closer to finally taking on Big Pharma and lowering Rx drug prices for millions of Americans.”

Senate Finance Committee Chairman Ron Wyden, D-Ore., said he was “disappointed” that penalties for high drug prices for privately insured consumers were dropped, “although the legislation significantly checks Big Pharma’s ability to raise prices.”

The lawmakers’ decision came after a 10-day period in which Democrats resurrected top components of President Joe Biden’s domestic agenda after they appeared 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.


Associated Press writer Matthew Daly contributed to this report.

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