Democrats suffer blow on drug pricing as 3 moderates buck party

Democrats’ signature legislation to lower drug prices was defeated in a House committee on Wednesday as three moderate Democrats voted against their party.

Reps. Kurt Schrader (D-Ore.), Scott Peters (D-Calif.), and Kathleen Rice (D-N.Y.) voted against the measure to allow the secretary of Health and Human Services to negotiate lower drug prices, a long-held goal of Democrats.

The vote is a striking setback for Democrats’ $3.5 trillion package. Drug pricing is intended to be a key way to pay for the package. Leadership can still add a version of the provision back later in the process, but the move shows the depth of some moderate concerns.

The three moderates said they worried the measure would harm innovation from drug companies and pushed a scaled-back rival measure. The pharmaceutical industry has also attacked Democratic leaders’ measure, known as H.R. 3, as harming innovation.

The three lawmakers had long signaled their concerns with the drug pricing measure, but actually voting it down in the House Energy and Commerce Committee is an escalation.

A separate committee, the House Ways and Means Committee, did advance the drug pricing measures on Wednesday, keeping the provisions in play for later in the process.

Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) had implored the three lawmakers to vote in favor of the measure to at least keep the process going. 

“Vote to move forward today,” he said to the moderates in his party. “Vote to continue the conversation.”

Still, Pallone said he is confident that some form of measure to lower drug prices will make it into the final package. The House legislation was already expected to change before the final version, given moderate Democratic concerns in the Senate as well. Senate Democrats are working on their own bill, which is not yet finalized but is expected to be less far-reaching. 

“I know it is going to have drug pricing reform,” Pallone said of the final bill, noting that negotiations with the Senate would continue over the coming weeks. 

Still, the move on Wednesday is a show of force from the moderates. 

Henry Connelly, a spokesman for Speaker Nancy Pelosi (D-Calif.), said Democrats were not giving up on including drug pricing measures. 

“Polling consistently shows immense bipartisan support for Democrats’ drug price negotiation legislation, including overwhelming majorities of Republicans and independents who are fed up with Big Pharma charging Americans so much more than they charge for the same medicines overseas,” he said in a statement after the vote. “Delivering lower drug costs is a top priority of the American people and will remain a cornerstone of the Build Back Better Act as work continues between the House, Senate and White House on the final bill.”

Peters and Schrader both cited concerns about harming drug companies’ ability to develop new drugs, citing the industry’s record during the COVID-19 crisis.

Peters warned that “government-dictated prices” under the bill would cause harm to the “private investment” that backs drug development.

Schrader said the bill would mean “killing jobs and innovation that drives cures for these rare diseases.”

Advocates said the lawmakers were simply beholden to the pharmaceutical industry.

“Reps. Peters, Rice, and Schrader are prioritizing drug company profits over lower drug prices for the American people, particularly for patients with chronic conditions such as diabetes and multiple sclerosis,” said Patrick Gaspard, president of the left-leaning Center for American Progress. “To the contrary of what they contend, their opposition to the drugs proposal threatens the entirety of President Joe Biden’s Build Back Better agenda, which Democrats have campaigned on for years and that they previously voted for.”

Savings from the drug pricing provisions are a key way of paying for other health care priorities in the $3.5 trillion package, including expanding Medicaid in the 12 GOP-led states that have so far refused, expanding financial assistance under ObamaCare, and adding dental, vision, and hearing benefits to Medicare.

The Congressional Budget Office found that H.R. 3 would save about $500 billion over 10 years. Depending on what Senate Democrats can find agreement on, the final drug pricing legislation is expected to be less far-reaching, meaning it will result in fewer savings, though how much less is unclear.

The Senate bill would still allow Medicare to negotiate lower drug prices, but it is expected not to include another provision that would cap drug prices based on the lower prices paid in other wealthy countries. That provision has drawn particular pushback from some moderate Democrats.

Allowing Medicare to negotiate drug prices is extremely popular with voters, with almost 90 percent support in a Kaiser Family Foundation poll earlier this year. Many vulnerable House Democrats support the idea.

Updated at 5:18 p.m.