The Democrats’ sweeping economic package was narrowed somewhat on Saturday after a ruling by a top Senate official struck down one of the provisions aimed at lowering prescription drug prices.
The Senate parliamentarian, an official who determines whether provisions meet the chamber’s complicated budget rules, struck down part of a provision that would limit drug companies’ price increases to the rate of inflation.
Senate Democrats had proposed that drug companies would have to pay rebates back to the government if their prices rose faster than inflation, both in Medicare and in the private health insurance market.
The parliamentarian allowed the provision to remain in Medicare, but struck it down for people with private health insurance, such as those who get coverage through their jobs, a significant portion of the population.
Still, as expected, the lawmaker was allowed to stand the Democrats’ signature drug pricing bill, which for the first time would allow Medicare to negotiate lower drug prices on some drugs.
The parliamentarian was also allowed to stand the Democrats’ tax package for clean energy. Other parts of the package are still awaiting decisions, including a $35 cap on what patients will have to pay out-of-pocket for insulin.
“Democrats have received extremely good news: For the first time, Medicare will finally be allowed to negotiate prescription drug prices, seniors will have free vaccines and their costs capped, and much more,” Senate Majority Leader Charles Schumer (DN.Y.) said in a statement. “This is a major victory for the American people. 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.”
The provisions are assessed based on whether they have a sufficiently significant impact on the federal budget. The rules stem from the special procedure Democrats use for their package to avoid a GOP filibuster called a budget vote.
The end result is that the price savings included in the package are even more focused on seniors on Medicare and largely do not affect people with private health insurance.