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Senate parliamentarian approves most of Dems’ drug price controls

Written by Javed Iqbal

WASHINGTON (AP) – Senate lawmakers narrowed Democrats’ plan to cap drug prices but left it largely intact Saturday, Democrats said, as party leaders prepared to begin moving their a large financial bill through the chamber.

Elizabeth MacDonough, the chamber’s rules judge, also gave the green light to clean air provisions in the measure, including limiting tax credits for electric vehicles to those assembled in the United States, Democrats said.

The nonpartisan official’s rulings came as Democrats planned to begin Senate votes Saturday on their sweeping package of climate change, energy, health care costs, taxes and even deficit reduction. Party leaders have said they believe they now have the unity they need to move the legislation through the 50-50 Senate, with Vice President Kamala Harris’s tie-breaking vote.

MacDonough said provisions must be removed that would force drugmakers to pay rebates if their prices rise above inflation for products they sell to private insurers. However, pharmaceutical companies would have to pay these fines if their prices for drugs purchased by Medicare rise too high.

Dropping sanctions on drugmakers for raising prices on private insurers was a clear setback for Democrats. The decision reduces drug companies’ incentives to limit what they charge, increasing costs for patients.

Deleting that language would cut the $288 billion in 10-year savings that Democrats’ overall drug restrictions were estimated to generate — a reduction of perhaps tens of billions of dollars, analysts have said. But other restrictions on rising pharmaceutical costs survived, including letting Medicare negotiate the cost of the drugs it buys, limiting out-of-pocket expenses for seniors and providing free vaccines.

The surviving pharmaceutical provisions left Democrats promoting the drug language as a boon for consumers at a time when voters are furious about the worst inflation in four decades.

“This is a great victory for the American people,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement. “While there was an unfortunate verdict in that the inflation discount is more limited in scope, the overall program remains intact and we are one step closer to finally taking on Big Pharma and lowering Rx drug prices for millions of Americans.”

Senate Finance Committee Chairman Ron Wyden, D-Ore., said that while he was “disappointed” the penalties for higher drug prices for privately insured consumers were dropped, “the legislation nevertheless puts a significant check on Big Pharma’s ability to set prices.” “

The lawmaker’s decision came after a 10-day period in which Democrats revived top components of President Joe Biden’s domestic agenda after they had seemingly died. In quick deals with the Democrats’ two most unpredictable senators – first conservative Joe Manchin of West Virginiathereafter Arizona centered Kyrsten Sinema – Schumer put together a broad package that, while a fraction of earlier, larger versions that Manchin derailed, would give the party a performance against the backdrop of fall congressional elections.

The parliamentarian signed a fee on excess emissions of methane, a strong contributor of greenhouse gases, from oil and gas drilling. She also left environmental subsidies for minority communities and other initiatives to reduce CO2 emissionssaid Senate Environment and Public Works Chairman Thomas Carper, D-Del.

She approved a provision requiring union wages to be paid if energy efficiency projects are to qualify for tax credits, and another that would limit tax credits for electric vehicles to those cars and trucks assembled in the United States.

The overall measure faces unanimous Republican opposition. But assuming Democrats fight a nonstop “vote-a-rama” of amendments — many designed by Republicans to derail the measure — they should be able to strengthen the measure through the Senate.

House passage could come when that chamber returns briefly from recess on Friday.

“What a vote-a-rama is going to be. It’s going to be like hell,” Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said Friday of the upcoming GOP changes. He said that by supporting it Democratic bills “authorize Manchin and Sinema legislation that will make life harder for the average person” by forcing up energy costs with tax increases and making it harder for businesses to hire workers.

The bill offers spending and tax incentives to move toward cleaner fuels and support coal with help to reduce carbon emissions. Expiring grants that help millions of people afford private insurance premiums will be extended for three years, and there is $4 billion to help Western states fight drought.

There would be a new minimum tax of 15% on some companies that make over $1 billion annually, but pay far less than the current 21% corporate tax. There would also be a 1% tax on companies buying back their own shares, traded in after Sinema refused to back higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be pumped up to bolster its tax collections.

While the final cost of the bill is still being determined, it would spend a total of more than $300 billion over 10 years to curb climate change, which analysts say would be the nation’s largest investment in the effort, and billions more on health care. That would raise more than $700 billion in taxes and from state drug cost savings, leaving about $300 billion for deficit reduction — a modest bite of the projected multi-trillion-dollar 10-year deficit.

Democrats are using special procedures that would let them pass the measure without having to reach the 60-vote majority that legislation often needs in the Senate.

It is the parliamentarian’s job to decide whether pieces of legislation should be dropped for violating those rules, which include a requirement that provisions primarily aim to affect the federal budget, not impose new policy.

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Associated Press writer Matthew Daly contributed to this report.

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Javed Iqbal

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