WASHINGTON — Senate Democrats are close to a deal to lower prescription drug costs as part of a larger party-line package to advance a number of President Joe Biden's economic priorities, three sources familiar with the negotiations said.
Democrats plan to submit a "finalized agreement" on allowing Medicare to negotiate prices with pharmaceutical companies to a key Senate official "in the coming days" to see whether it complies with the chamber's strict budget rules, one of the sources said.
The source, who requested anonymity to discuss sensitive negotiations between Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va., described the expected move as "major progress" that shows Democratic leadership wants to "move forward with a bill on the floor as early as next month."
There's no final deal on the broader bill, however, as the other major parts of the "reconciliation" package — energy and climate policy provisions and tax changes to raise revenue — are still being negotiated between Schumer and Manchin. Unless an agreement can be reached quickly, it would be difficult to pass the bill before a scheduled monthlong August recess.
Manchin’s office said Wednesday there is consensus and a path forward on drug pricing.
“Senator Manchin has long advocated for proposals that would lower prescription drug costs for seniors, and his support for this proposal has never been in question,” Manchin spokeswoman Sam Runyon said. “He’s glad that all 50 Democrats agree.”
What's in the drug pricing deal?
According to a summary of provisions obtained by NBC News, the emerging deal would empower Medicare to directly negotiate prescription drug prices starting next year to lower costs for consumers. It would cap out-of-pocket costs for Medicare patients at $2,000 per year and allow the cap to be broken up into monthly payments. It also would impose a new "inflation rebate" policy forcing drug companies to send money back to consumers if they raise prices above inflation.
In addition, the deal would add new incentives for drugmakers and insurers to limit drug price hikes, provide free vaccines for seniors, enhance premium and copay assistance for lower-income people and ensure the Department of Health and Human Services always negotiates for the maximum number of eligible drugs. And it would require negotiations to lower prices "if a drug company continues to block generic competition," the summary said.
Manchin rejected the House-passed Build Back Better Act in December but later indicated openness to a slimmed-down version that includes drug savings, climate and energy policy and higher taxes on upper earners and corporations. The Senate has not taken any action since then.
Schumer and Manchin have held private talks for weeks — so private that many Democratic senators say they've been out of the loop.
One of the sources said Democrats are presenting the drug provisions to the Senate parliamentarian, who determines whether they adhere to arcane budget rules, because they know time is short and they want to be ready to act quickly if a larger deal materializes. Their intention to do that was first reported by The Washington Post.
A separate source said the biggest unresolved issues on the energy front are the scope of incentives for electric vehicles and whether to let entities access cash directly as opposed to going through large financial institutions.
It's unclear whether enhanced Affordable Care Act subsidies to prevent premium hikes for millions of people will be in the deal.
Bypassing a Republican filibuster
Any agreement, which would aim to bypass a Republican filibuster under a special budget process, is unlikely to include provisions like paid leave, child care and cash payments for raising kids, as Manchin, a pivotal vote in the 50-50 Senate, has said those issues should be dealt with through the regular 60-vote process.
Republicans have made it clear they won't provide any votes for a bill focused on advancing Biden's safety-net agenda. Senate Minority Leader Mitch McConnell, R-Ky., has repeatedly blasted the Democrats-only reconciliation effort as a "tax and spending spree" and said he hopes the party doesn't revive it.
Last month, Schumer told NBC News that he and Manchin agreed to keep their conversations quiet. "Manchin and I have an agreement: We're not discussing what we have discussed or will discuss," he said, adding that the reconciliation effort was still alive.
Nancy LeaMond, the executive vice president of AARP, which advocates for older Americans, said the organization is "pleased that the Senate is ready to take action on a reconciliation package that includes allowing Medicare to be able to negotiate lower prices for prescription drugs. This is monumental and years in the making."
AARP has run ads in West Virginia to defend Manchin on the issue as Republicans and pharmaceutical companies pressure him to reject any deal with fellow Democrats.
Democratic pollster Celinda Lake said lowering drug prices could deliver political rewards for the party in the midterm elections.
"If I were the Democrats right now, if I could tell them to pass one thing, it would be the prescription drugs," she said. "It would be negotiate drug prices, just like" the Department of Veterans Affairs.
Lake said support for the idea is "off the charts" as many Americans, especially older voters, suffer from high medicine prices.
"People are furious about it. They have wanted it forever," she said of a bill to lower costs. "They think that both parties are bought."