Democrats eye sweeping drug-pricing reform to fund infrastructure spending

Democratic lawmakers joined by Sen. Bernie Sanders (I-Vt.) are preparing drug pricing controls that could help bankroll a planned $3 trillion infrastructure bill they will attempt to pass in the summer.

If Democrats add the drug-pricing proposal to their next budget reconciliation bill, they could pass it with a simple majority in both the House and Senate. Democrats used the same maneuver to pass the $1.9 trillion COVID-19 stimulus bill.

Democrats have introduced three bills that could enable substantial pricing reform if passed. They would allow Medicare to negotiate drug pricing, tie the price of drugs to five other nations with lower median pharma expenditures, and permit Americans to import drugs from Canada and other countries.

The Medicare Drug Price Negotiation Act is modeled after a previous bill — the “Elijah E. Cummings Lower Drug Costs Now Act” (H.R. 3), which would levy a range of drug pricing controls. UBS analysts have referred to the legislation as “onerous” for the industry. PhRMA agrees, stating in 2019 that the proposal “dramatically expands the role of the federal government in health care decision making and puts medical innovation at risk.”

The Democrat-controlled U.S. House of Representatives passed the bill along party lines in December 2019 but failed to gain traction in the Senate.

It is unclear whether moderate Senators now would back the bill, which has the support of progressive Democrats.

The plan could save the U.S. government close to “half a trillion dollars,” according to Speaker Nancy Pelosi (D-Calif.).

That figure is likely a reference to the Congressional Budget Office’s assessment that H.R. 3 could save $456 billion over ten years.

Some pharma lobbyists are concerned Democrats could view their industry as a “piggy bank” for infrastructure spending, according to Politico.

According to a recent Rand report, U.S. drug prices in 2018 were 256% higher than in other comparable countries.