
Manchin plays spoiler again, but drug pricing reforms remain on the table
West Virginia Democrat Sen. Joe Manchin has made loud and clear how much his single vote matters for the Senate Dems, and their even 50-50 split with Republicans, once again laying guardrails around a reconciliation package that could pass with that simple majority — thanks to VP Kamala Harris.
But for the former Mylan CEO’s father, Manchin’s already forged an agreement on drug pricing reforms, which his daughter’s former industry group officially opposes. The CBO has since projected the new negotiations will save the federal government $288 billion through 2031, a far cry from Nancy Pelosi’s HR 3, but could reduce drugmakers’ potential output of about 1,300 total drug approvals over 30 years by about 10 drugs.
A Manchin spokesperson told the New York Times that he hasn’t walked away from the negotiating table but the Washington Post and the Times both reported last night that Manchin has decided to cut out climate and tax provisions from the package, which “dealt a crushing blow to President Biden’s domestic agenda, effectively ruling out action on anything beyond prescription drug pricing and health care subsidies.”
Senate Dems last week unveiled their new Medicare drug price negotiations bill, which beginning in 2026 would allow for the negotiation of 10 eligible drug prices, and build up to 20 by 2029.
As news of the bill broke, companies continued with their typical mid-year price increases, with dozens raising 112 wholesale acquisition cost, or WAC, prices. By comparison, in July 2012, there were 397 WAC price increases, according to new 46brooklyn research data.
More recently, companies have pledged to stay below the 10% increase threshold, and Pfizer on July 1 notably raised three drugs more than any others so far this month, with 10% price increases for Benzylpenicillin, also known as penicillin G, blood pressure drug Corlopam, and its blood thinner Fragmin.
The generic drug industry group, the Association for Accessible Medicines and its Biosimilars Council announced its opposition to the new Senate pricing reforms, saying they will increase risks for generic and biosimilar manufacturers as the companies will have “no way to know whether a brand-name drug will be selected for negotiation or what the negotiated price may be” until well after a copycat’s development would need to already begin.
If the Senate price negotiation bill passes, companies that don’t comply with the new prices can be assessed penalties of up to $1 million per day, according to the bill text. And any manufacturer that “knowingly provides” false information also can be subject to fines of $100 million per infraction.
The Senate proposal, which mirrors the previous efforts in the Build Back Better Act, which Manchin previously torpedoed, would also cap seniors’ drug costs under Medicare at $2,000 annually, but it noticeably does not include a $35 monthly cap on insulin costs for those with insurance, which Sen. Chuck Schumer (D-NY) has twice pledged to vote on.
The CBO yesterday revealed that the Senate insulin cap would cost the federal government $23 billion over the next decade, which came to about double what the House version would cost, explaining:
CBO estimated that H.R. 6833 would have no net effect on the federal deficit over 10 years and that the insulin-related provisions of the bill would increase federal deficits by $11.4 billion over that period. This estimate for the Senate legislation reflects the differences between the two bills including an estimated increase in the average net price of insulin resulting from the certification process, an estimated increase in Medicaid spending resulting from a reduction in rebates paid by insulin manufacturers, and changes to limits on cost sharing. The Senate legislation also does not include the provisions that would delay implementation of the rule related to manufacturer rebates.