WASHINGTON — President Biden told Congress Wednesday to let Medicare negotiate drug prices this year. But it’s an empty call to action.
“Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower prices for prescription drugs. That won’t just help people on Medicare – it will lower prescription drug costs for everyone,” Biden said in his address. “Let’s get it done this year.”
But the president snubbed drug pricing policy in his sweeping proposal to reform the social safety net — a move that leaves it out of one of the few policy packages that has a meaningful chance of clearing Congress this year. Already, the president is hoping Congress will pass two gigantic pieces of legislation before it turns to its annual, must-pass appropriations legislation.
“It’s a bit of a cop-out from the Biden administration. They are saying we still want this, we’re just not going to do it,” said American Action Forum Director of Health Care Policy Chris Holt.
Lawmakers could certainly ignore Biden’s suggestion and instead try to attach drug pricing provisions to either of the major packages Biden is calling for. House Energy & Commerce Committee Chair Frank Pallone (D-N.J.) on Wednesday said reducing drug prices would be one of his top priorities as his panel works to pass Biden’s safety-net plan, and Senate Finance Committee Chair Ron Wyden (D-Ore.) said he plans to pursue every possible vehicle for reform.
That Biden’s push stopped at a verbal call for drug pricing policy — a popular issue with voters and a longtime plank for Democrats — is something of a surprise, after the White House chief of staff earlier this month publicly pledged to address the issue in the package Biden unveiled Wednesday evening.
Biden’s position reflects that the idea of Medicare negotiation has broad support in the Democratic caucus, in theory, but getting a robust policy passed will be difficult. He appeared to support House Speaker Nancy Pelosi’s aggressive Medicare negotiation proposal, which could impose tough penalties on drug makers and which ties American drug prices to foreign ones.
However, that bill may alienate moderate Senate Democrats.
A toothless proposal to simply allow the HHS secretary to negotiate drug prices may garner more support but may not save the government any money at all. It’s unclear whether it could pass muster under the budgetary process Democrats may use to pass their biggest priorities without Republican support.
Republicans, many of whom support broad ideas to lower drug costs, appeared to stay seated for most of Biden’s remarks calling for Medicare drug price negotiation. Democrats stood to applaud.
“Biden is putting pressure on proponents of price negotiation that they need to move forward and figure out how it could work in a reconciliation package,” said Anna Weinstein, a senior director at Hogan Lovells, referring to the fast-track budgetary process Democrats hope to use for Biden’s two major packages.
Biden’s decision to leave drug pricing out of his safety-net proposal may not signal a difference in his stance on the issue of drug pricing, said Ernst & Young Washington Council Principal Heather Meade, but an acknowledgement of how difficult finding consensus could be.
“The legislative challenge is that the jobs package and the families package will take a substantial amount of time, staff resources and committee time. In the Senate and House they will take a substantive amount of their legislative calendar. Are they able to move something both complex and controversial like drug pricing, too?” Meade said.
The White House knew their legislative agenda would already be a heavy lift, and adding drug pricing to the mix would have added yet another reason for members to peel off, said Capitol Street Managing Director Ipsita Smolinski.
Beyond the policy merits, lawmakers’ calendar is jam-packed and nebulous for the rest of the year. Lawmakers haven’t even settled on how they are planning to generally package their priorities, and Sen. Joe Manchin (D-W.V.) is already raising concerns about funding Biden’s infrastructure package by raising taxes on corporations. It’s unclear exactly how many chances the party will have to use the budget reconciliation process.
Further variables include how long the Biden administration entertains bipartisan talks before potentially moving to leave Republicans behind, and how Biden’s proposed policies to pay for certain priorities stack up to spending wish lists, said Avalere Health Principal Matt Kazan.
The White House’s silence could leave space for lawmakers to fill in the details and find a consensus policy.
That approach didn’t work for President Trump, who fruitlessly called for lawmakers to send him a drug pricing bill during his 2020 State of the Union address. However, pursuing reform was harder then because control of Congress was split and the Covid-19 pandemic quickly derailed the legislative calendar.
Advocates for drug pricing reform weren’t pleased by Biden’s decision to leave out drug pricing from his plan, but they remain hopeful Congress might break the gridlock that has long stunted reform efforts.
Margarida Jorge, who heads a drug pricing advocacy coalition that includes several unions, Families USA, Public Citizen, and the Center for American Progress’ political arm, said she believes lawmakers who will actually be writing the bills understand the urgency in addressing drug pricing now, as the outcome of the midterm elections is uncertain.
“We have seen Congress do some incredible things when it decides something is important,” Jorge said.