House Speaker Nancy Pelosi has released her Medicare prescription drug plan, designed to lower soaring prices for Medicare beneficiaries and to entice Donald Trump into actually fulfilling one of his campaign promises.
The plan would allow the government to negotiate prices on as many as 250 name-brand drugs, but only requires that the government set lower prices on 25. That lower limit has worried progressives, who have been largely excluded from the development of the plan. Pelosi is meeting with the Congressional Progressive Caucus Thursday to discuss the proposal, which is designed in part to get Trump’s support and drive a wedge between him and Senate Republicans.
Sen. Ron Wyden, Democrat of Oregon, and Iowa Republican Sen. Chuck Grassley have also introduced drug-pricing legislation. It requires rebates from drug companies if their price increases exceed inflation and also caps out-of-pocket drug costs for Medicare beneficiaries. Pelosi’s proposal includes those elements as well. It’s opposed by a lot of Republicans who say it’s akin to government price-fixing, but it has been something Trump has talked about doing.
Trump, being Trump, has been kind of all over the place on what he wants, but there’s definitely overlap with what Pelosi is proposing, including the out-of-pocket spending cap. He also endorsed the idea of government negotiating drug prices for Medicare during the 2016 campaign, an idea most Republicans staunchly oppose. Trump is the wild card here, as always. His support for the Pelosi plan could potentially force Mitch McConnell to take it up. It all depends on how much Trump thinks he needs to do something on health care to keep his promise and to distract from his attempts to destroy the Affordable Care Act. It also depends on how much sway McConnell has with him, because Moscow Mitch is not going to want to give Pelosi a win.
Pelosi’s plan would cap negotiated prices on drugs at 1.2 times the average of what other countries pay. Other elements of the Pelosi plan include an excise tax on annual gross sales of companies that refuse to negotiate, starting at 65% and increasing by 10% every quarter the company continues to be out of compliance. It also limits price increases on Medicare Part D and Part B to inflation, and restructures Part D’s financing.