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Democrats announce deal for lower drug prices in Biden bill

Under the deal, out-of-pocket Medicare costs are capped at $2,000 and the price of insulin will be reduced.

WASHINGTON — Democrats reached agreement Tuesday on a deal to lower prescription drug costs for older people, capping out-of-pocket Medicare costs at $2,000 and reducing the price of insulin, salvaging a campaign promise as part of President Joe Biden's $1.75 trillion domestic policy proposal.

Senate Majority Leader Chuck Schumer announced the agreement. He acknowledged it's not as sweeping as Democrats had hoped for, but a compromise struck with one key holdout Democrat, Sen. Kyrsten Sinema, as the party moves closer to wrapping up negotiations on Biden's big package.

“It’s not everything we all want. 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,” Schumer said at the Capitol.

Sinema's office issued a statement saying the senator “welcomes a new agreement on a historic, transformative Medicare drug negotiation plan that will reduce out-of-pocket costs for seniors.”

Democrats are rushing to overcome party battles and finish a final draft of Biden's big plan. House Speaker Nancy Pelosi said privately she expects to wrap up a draft by midday and pave the way for voting as soon as Thursday on the overall package, according to her remarks at a closed-door caucus meeting. But no votes have been scheduled.

The stakes are stark as Democrats are warily watching governors' races Tuesday in two states — Virginia and New Jersey — that are seen as bellwethers in the political mood of the electorate. Democrats are struggling to hold states that recently favored the party from Republicans.

Blame is pointing all around as negotiations over Biden's ambitious package have dragged on, with Democrats unable to mount the support to pass the bill. Progressive and centrist lawmakers, particularly holdout Sens. Joe Manchin and Sinema, have fought over details of the sprawling 1,600-page package.

“I think what most people think: the situation is like, ‘Okay, we elected Democrats to have the majority in the House, the Senate and the presidency. They should be getting things done,’” Democratic Rep. Elaine Luria, who represents a swing district in Virginia, told reporters at the Capitol.

Despite efforts to drive momentum, Manchin interjected fresh uncertainty this week by publicly wavering again over whether or not he would support the party's ambitious effort.

The conservative West Virginia Democrat has been an unreliable partner for Biden's big vision, raising questions and concerns about the president's plans expand health care, child care and other social services and tackle climate change.

Manchin's outlook angered some lawmakers who have tired of his protests but energized others, particularly progressives, to speed up the vote. Manchin also showed no signs of relenting Tuesday, despite widespread criticism over the power of a single senator to hold up the party's signature domestic priority.

“It's going to be a while,” Manchin said in brief comments Tuesday at the Capitol.

Meanwhile, Democrats shored up at least one unsettled provision — the prescription drug deal that is not as robust as first envisioned but would still limit some pharmaceutical costs by allowing Medicare to negotiate for lower prices.

“For the first time, Medicare will be empowered to negotiate prescription drug prices in Part B and Part D,” Schumer said. “There will be an annual cap on out of pocket costs, a new monthly cap on the price of insulin, and an ‘inflation’ rebate policy to protect consumers from egregious annual increases in prices.”

Schumer later said insulin prices would fall from as high as $600 a dose to $35.

Sen. Ron Wyden, D-Ore., the chairman of the Finance Committee, who has been working to strike the pharmaceutical deal said earlier: “You put these things together and you’re moving towards a financial reality where a prescription is no longer a financial ball and chain for American families.”

With Republicans staunchly opposed and no votes to spare, Democrats have been trying to unite progressive and centrist lawmakers around Biden’s vision.

Pelosi told Democrats at Tuesday's morning caucus meeting that “hopefully by midday" they will be able to “freeze” the design of the bill. She announced a process for possible vote as soon as Thursday. The remarks were conveyed by a person familiar with her comments who requested anonymity to share the private meeting.

“I think we're going to pass both bills — hopeful this week if we get the differences that are still outstanding resolved,” Majority Leader Steny Hoyer, D-Md., said at the Capitol.

It’s unclear whether Manchin’s resistance will deliver a debilitating blow to those efforts or have the opposite effect of propelling Democrats to start taking votes on Biden’s proposal.

Rather than providing assurances to his progressive colleagues that he was on board, Manchin reiterated his long-running concerns. He then urged progressives to quit holding “hostage” a smaller $1 trillion public works bill they have withheld as leverage as negotiations continue on the broader package.

Manchin said he’s open to voting for a final bill reflecting Biden’s big package “that moves our country forward.” But he said he’s “equally open to voting against” the final product as he assesses the sweeping social services and climate change bill.

The White House swiftly responded that it remains confident Manchin will support Biden's plan. And progressive leaders, being blamed for having stalled votes last week on the smaller bill, said it's time to vote on both.

Rep. Pramila Jayapal, D-Wash., the leader of the progressive caucus said, "I don’t know what Sen. Manchin is thinking, but we are going to pass both bills through the House and we are going to deliver transformative change to the people.”

Biden unveiled a framework for the package last week, a sizable investment in social service programs and climate change strategies, but Democrats are trying to negotiate the drug prices for seniors, immigration law changes and other final updates.

The $1.75 trillion package is sweeping in its reach, and would provide large numbers of Americans with assistance to pay for health care, education, raising children and caring for elderly people in their homes. It also would provide some $555 billion in tax breaks encouraging cleaner energy and electrified vehicles, the nation's largest commitment to tackling climate change.

Much of its costs would be covered with higher taxes on people earning over $10 million annually and large corporations, which would now face a 15% minimum tax in efforts to stop big business from claiming so many deductions they end up paying zero in taxes.

Some moderate Democrats in the House said they want to see the final assessment from the Congressional Budget Office, which will offer a nonpartisan review of the overall bill’s entire budgetary costs, before taking the vote.


Associated Press writers Kevin Freking and Alan Fram contributed to this report.

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