Democrats Strike Deal to Lower Prescription Drug Prices

Plus: Biden says Manchin will back final bill ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Election Day! As voters in Virginia and elsewhere headed to the polls, Democrats said they made progress Tuesday toward resolving some of the outstanding differences that have slowed their Build Back Better plan — steps that could bring them closer to a House vote as soon as this week on both the $1.85 trillion package focused on the care economy and climate change and a separate bipartisan infrastructure bill. And President Joe Biden expressed optimism that Sen. Joe Manchin (D-WV), who on Monday effectively slammed the brakes on efforts to speed to a deal, would ultimately support the legislation. Here’s what you need to know. [*] Biden Says Manchin ‘Will Be There’ on Build Back Better Vote President Biden on Tuesday told reporters that he believes Manchin will ultimately back Democrats’ social spending and climate change bill. "I believe that Joe will be there," Biden said of the West Virginia senator during a news conference to close the United Nations climate summit in Glasgow, Scotland. Manchin made clear Monday that he still has significant misgivings about details of the package and the speed with which his fellow Democrats are trying to enact it. He decried the use of budgetary gimmicks to lower the official cost of the legislation and expressed concern that the spending involved could spur additional inflation. And he said he needed more time to understand the likely economic and fiscal effects of the package. On Tuesday, Manchin told reporters that he had never signed off on the $1.85 trillion Build Back Better framework released by the White House last week and that there’s no rush to finalize the legislation at this point, again taking aim at progressives for blocking a vote last week on the bipartisan infrastructure bill that would have delivered Biden a win before he headed to Europe. “I just think it’s going to take quite a while,” Manchin said. “We’re not in a rush right now.” Other Democrats evidently feel differently. They are racing to nail down a deal and potentially put it to a vote in the House as soon as this week — before an official score of the legislation from the Congressional Budget Office is ready. That score reportedly could take about two weeks. Senate Majority Leader Chuck Schumer (D-NY) said Tuesday he hopes his chamber can take up the bill on November 15. But a number of centrist House Democrats — Reps. Ed Case of Hawaii, Jared Golden of Maine, Josh Gottheimer of New Jersey, Stephanie Murphy of Florida and Kurt Schrader of Oregon — said in a letter to House Speaker Nancy Pelosi that they [want 72 hours]( to review the package and a cost estimate by the Joint Committee on Taxation and Congressional Budget Office before any House vote. That could push any House action on the package into next week at the earliest. Whenever a Senate vote happens, Biden indicated Tuesday he expects Manchin to back the legislation. The president said Manchin is just looking to ensure that the details of the final legislative text match up with what he has indicated he would support. "He will vote for this if we have in this proposal what he has anticipated, and that is looking at the fine print and the detail of what comes out of the House in terms of the actual legislative initiatives," Biden said. Democrats Strike Deal to Let Medicare Negotiate Drug Prices Senate Democrats on Tuesday announced they have reached an agreement on a plan to lower the prices of some drugs covered by Medicare. The proposal, part of Democrat’s $1.85 trillion spending bill, would empower the federal government to negotiate prices directly with drugmakers on a limited basis for the first time in the history of Medicare, marking a historic shift that pharmaceutical companies have resisted for decades. “Today we’ve taken a massive step forward,” Senate Majority Leader Chuck Schumer (D-NY) said as he announced the agreement. The plan is far shy of what some Democrats had hoped for, though, since it limits the government’s negotiating power to a subset of drugs. Under the agreement, the full details of which have not yet been released, the 10 drugs that cost Medicare the most would be subject to price negotiations starting in 2023, with the list of drugs growing to 30 over a period of years. In a further limitation, the set of drugs that can be negotiated will be limited to those that no longer have "exclusivity," or protection from generic competition. The plan includes a $35 per month cap on the cost of insulin for those in Medicare, as well as a $2,000 per year cap on out-of-pocket expenses for drugs. And it would penalize drugmakers that raise prices faster than inflation, in both Medicare and commercial health insurance plans. Larry Levitt of the Kaiser Family Foundation said the scaled-back agreement is significant nonetheless. “The emerging Democratic deal on drug costs is more modest across the board than the original aspiration, but it still checks all the boxes,” Levitt tweeted. Senate Finance Chairman Ron Wyden (D-OR) said the plan would save hundreds of billions of dollars and set an important precedent that the government can negotiate the prices of drugs covered by Medicare. “The prohibition on negotiation has almost been like a curse,” Wyden said. “There was a sense the government had its hands tied behind its back. And now a precedent is being set that starting right out of the gate there’s going to be negotiation on the most expensive drugs — cancer drugs, arthritis drugs, anticoagulants.” Three Democrats who resisted earlier efforts to give the federal government the power to negotiate drug prices – Sen. Kyrsten Sinema (AZ) and Reps. Scott Peters (CA) and Kurt Schrader (OR) – helped broker the agreement and signaled they would support it. “It’s not everything we all want,” Schumer said. “Many of us would have wanted to go much further, but it’s a big step in helping the American people deal with the price of drugs.” Stephen Ubl, the president and CEO of drug industry trade group PhRMA, panned the deal: “While we’re pleased to see changes to Medicare that cap what seniors pay out of pocket for prescription drugs, the proposal lets insurers and middlemen like pharmacy benefit managers off the hook when it comes to lowering costs for patients at the pharmacy counter. It threatens innovation and makes a broken health care system even worse. House Dems Consider Suspension of SALT Cap; Sanders Calls It ‘Beyond Unacceptable’ Blue state Democrats said Tuesday they are optimistic that President Biden’s social spending package will include a five-year suspension of the current $10,000 cap on state and local tax (SALT) deductions. “Today’s news is encouraging for a SALT cap repeal to be included in the final reconciliation package,” Reps. Josh Gottheimer (D-NJ), Tom Suozzi (D-NY) and Mikie Sherrill (D-NJ) said in a joint statement. “We will continue to work with House and Senate leadership to ensure the cap on the SALT deduction is repealed.” The lawmakers repeated their previous threat to withhold support for the bill unless the SALT cap is repealed. “No SALT, no deal,” they wrote. “No SALT, no dice.” Critics of the SALT cap suspension or repeal — a group that includes both liberals and conservatives — were quick to express their opposition to the latest idea, which has been simmering on the legislative back-burner for months. “According to media reports, Democratic negotiators are working on a repeal of the SALT deduction cap for up to five years, which would cost $475 billion and give the richest 5% $400 billion in tax cuts,” said Sen. Bernie Sanders (I-VT) in a statement. “As a result, the top 1% would pay lower taxes after passage of the Build Back Better plan than they did after the Trump tax cut in 2017. This is beyond unacceptable.” Sanders said that he was “open to a compromise approach which protects the middle class in high tax states,” but he would “not support more tax breaks for billionaires.” House Ways and Means Committee Chairman Richard Neal (D-MA) said that discussions on the issue are ongoing. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- News - [Democrats on Cusp of Sweeping Deal on Biden Agenda]( – The Hill - [Democrats Announce Deal on Prescription Drug Pricing as Another Part of Spending Plan Comes Into Focus]( – Washington Post - [Moderate Democrats Press for CBO Score Before Vote on Biden Package]( – The Hill - [House Vote on Biden’s Agenda Imperiled by Moderate Democrats]( – Bloomberg - [Manchin Blames Senate Rules for Paid Leave's Absence]( – The Hill - [House Plans to Skip Raising Debt Ceiling in Biden Agenda Bill]( – Bloomberg - [Congress Hits ‘Standstill’ as December Shutdown, Debt Cliff Near]( – Politico - [Not It: Democrats Dodge Blame for Stalled Agenda as McAuliffe Teeters]( – Politico - [Shelby Says Another CR Will Be Needed in December]( – The Hill - [Yellen Tries Assuring Ireland It Can Still Thrive Without Tax Rate Advantage]( – Washington Post - [Biden Says He Will Announce Fed Chair Pick ‘Fairly Quickly’ With Powell Term Up in February]( – CNBC - [Supply Chain Crisis Risks Taking the Global Economy Down With It]( – Bloomberg - [Tax Tactic of the Ultra-Wealthy: Split the Masterpiece in Two]( – Bloomberg - [CDC Advisers Back Nation’s First Vaccine for 5- to 11-Year-Olds]( – Washington Post - [‘Vax’ is Oxford’s Word of the Year, as Pandemic’s ‘Fauci Ouchie’ and ‘Inoculati’ Enter the Lexicon]( – Washington Post Views and Analysis - [‘A Lot to Balance’: How Manchin, Sinema Are Blocking a New Democratic Consensus]( – Ronald Brownstein, CNN - [How Progressives Are Playing Their Poker Cards]( – Jonathan Bernstein, Bloomberg - [What Happens if the House Votes on the Social Spending Bill This Week Without Manchin's Blessing]( – Chad Pergram, Fox News - [The Implosion That Didn't Happen -- and the Very Real Issues Biden Still Confronts on His Agenda]( – Phil Mattingly and Lauren Fox, CNN - [Democrats Not Only Have to Pass Their Social Spending Package. 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