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Utah Life Sciences News & Events

House Passes $3.5 Trillion Budget, Push Medicare Drug Price Negotiations

August 26, 2021

On Tuesday, the House Democrats passed a budget blueprint on a party line vote. That blueprint allows Committees in the House to start writing the administration’s $3.5 trillion social spending or “care infrastructure” legislation. Democrats hope to move the spending measure as a reconciliation measure in the Fall. Under the reconciliation process, only 51 votes will be needed to pass the package in the Senate. The Senate, with no support from Republicans, has already passed this budget framework, so Senate Committees can also begin writing the specifics of reconciliation legislation.

The budget blueprint envisions expanding healthcare benefits, such as the lowering the Medicare age to 60 (which observers view as a long shot), adding Medicare dental, vision and hearing coverage, paid family and medical leave and Medicaid expansion. To help pay for these added benefits, Democrats are seriously looking at giving Medicare the authority to negotiate drug prices, which could also be offered to commercial plans. It’s estimated that Medicare negotiations would result in $450 billion in savings over ten years to the Medicare program.

According to PhRMA, the biopharmaceutical national trade association, government-led drug price negotiations are not as popular with people as one might think. The site data from the Kaiser Family Foundation that 65% of Americans oppose negotiation if it leads to less research and development of new treatments or if it limits people’s access to medicines once they come to market. Additional data reveals that 72% of Americans actively oppose government negotiation if it results in fewer new medicines being developed in the future, and 76% of Americans oppose government negotiation if it causes delay in access to new prescription medicines.

The collapse of Afghanistan could slow the reconciliation process and give moderate Democrats in swing districts second thoughts about throwing their support behind the sweeping package and government price controls for medicines. However, to date, internal divisions over the size and scope of the measure have given the edge to progressives in the Democrat caucus that don’t favor a middle ground. Centrist Democrats in the Senate, namely, Senators Joe Manchin (D-WV) and Kristin Sinema (D-AZ) may ultimately hold the cards on the final outcome.