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Pelosi’s Drug Plan Would Let U.S. Negotiate Prices of 250 Medications

Speaker Nancy Pelosi’s plan would allow the government to negotiate the price of up to 250 name-brand drugs for Medicare beneficiaries — an idea that many Republicans hate but that President Trump embraced during his 2016 campaign.Credit...Anna Moneymaker/The New York Times

WASHINGTON — Speaker Nancy Pelosi on Thursday released her long-awaited plan to curb soaring prices of prescription drugs, a political chess move that could prod the Senate to move and heat up congressional negotiations with the White House on a popular but elusive goal.

Ms. Pelosi’s plan, which she laid out at a morning news conference, would allow the government to negotiate the price of insulin and as many as 250 name-brand drugs each year for Medicare beneficiaries — an idea that many Republicans hate but that President Trump embraced during his 2016 campaign. Drug companies would also have to offer the agreed-on prices to private insurers or face harsh penalties, which could give the package broader appeal with voters.

The hit to noncompliant companies would be even stiffer than the penalty in a draft of her plan that circulated last week. The penalty extracted from a company unwilling to comply would be equal to 65 percent of the previous year’s sales of the drug in question, but would gradually increase by 10 percentage points every quarter that the company refuses to offer the government’s price, to a maximum of 95 percent. Ms. Pelosi said that the House Energy and Commerce Committee would hold the first hearing on the bill on Wednesday, and that she hoped the committees of jurisdiction would begin drafting final legislation next month.

But even as Ms. Pelosi introduced the bill, Republicans on that committee indicated that they had no intention of getting behind it. In a statement, all 24 accused Ms. Pelosi of “pushing a socialist proposal to appease her most extreme members.”

“It does not have to be this way,” said the Republican members, led by Representative Greg Walden of Oregon. “There are bipartisan solutions to bring down prices for patients and create real transparency and accountability for this system.”

[The Upshot: No single policy is likely to fix the drug price problem.]

The bill’s main competition for now is a bipartisan but embattled drug-pricing package from the leaders of the Senate Finance Committee, Senators Charles E. Grassley, Republican of Iowa, and Ron Wyden, Democrat of Oregon, who are lobbying fiercely to build support for it.

Most notably, the bill would require drug companies to pay rebates to Medicare if they raised prices faster than inflation, and it would cap out-of-pocket drug costs for Medicare beneficiaries, proposals that are also in the Pelosi bill. Most Republicans on the committee voted against it, saying it smacked of government price fixing. But Mr. Grassley has been working hard to win more support, using Ms. Pelosi’s bill as a cudgel as he warns that the speaker’s prescriptions could succeed if his fail.

The speaker could also prompt the president to act. He has made drug prices a major theme of his re-election campaign, but has not scored an accomplishment to take on the trail next year. The question now is whether Mr. Trump will get behind the Finance Committee bill, stepping up pressure on Senator Mitch McConnell, the majority leader, or possibly even side with Ms. Pelosi, whose bill includes a version of an idea he really likes: to base the price Americans would pay for some drugs on the lower prices paid in other countries.

“Hopefully we can come to some agreement about what is best for the American people,” Ms. Pelosi said at the news conference at the Capitol, flanked by Representatives Richard E. Neal of Massachusetts, the Ways and Means Committee chairman, and Frank Pallone Jr. of New Jersey, the Energy and Commerce chairman. “My conversations with the president have been about making this a priority; I believe he considers it one, and so we can work together.”

On Thursday afternoon, the president posted his support on Twitter for the congressional negotiations. “I like Sen. Grassley’s drug pricing bill very much, and it’s great to see Speaker Pelosi’s bill today,” he tweeted. “Let’s get it done in a bipartisan way!”

Mr. Trump could also go his own way, following through on a promise to put out a proposed rule or executive order basing the prices for certain drugs in Medicare on those in other countries. That idea makes Republicans in Congress just as queasy as letting Medicare negotiate with drug companies, but it appeals to Mr. Trump’s “America First” sensibility and would be more limited.

“You’ve got the makings of a Trump-Pelosi alliance here on drug pricing, and that would be a powerful combination,” said Representative Peter Welch, Democrat of Vermont, who serves on the Energy and Commerce Committee. “Trump is the one who asked the practical question: Why do we get ripped off, why are we the suckers paying the highest prices in the world? Now he has an opportunity to address that.”

Ms. Pelosi would first have to bring both liberals and centrists in her caucus on board; she has already worked to win the liberals by dropping an initial proposal that would have let the Government Accountability Office, an independent investigative arm of Congress, decide a drug’s price if the government and manufacturer could not agree. Liberals did not want to farm that job out to a third party.

But some liberals are still unsatisfied with the number of drugs designated for annual price negotiations, for one thing; the bill would allow for a minimum of 25 per year and a maximum of 250.

“We think 25 a year is too low to have our constituents really appreciate” it, said Representative Mark Pocan, Democrat of Wisconsin and a chairman of the Congressional Progressive Caucus. He added that his group also thought the penalty for noncompliant drug companies should be even harsher, pointing to a bill from Representative Lloyd Doggett, Democrat of Texas, that would allow other companies to produce cheaper generic versions of any drug whose price the brand-name manufacturer refused to negotiate with the government.

A far bigger challenge would be getting Ms. Pelosi’s bill through the Senate, where it could die a fast death given the Republican aversion to several of its main provisions. In that, Mr. Trump is a wild card: His administration has been discussing drug pricing with Ms. Pelosi’s office for months, according to Mr. Deere.

Another big question is whether the pharmaceutical industry — which has been fighting fiercely against all of the ideas in play, spending millions on ad campaigns and direct lobbying — will thwart a deal. Chances of a drug pricing deal could also crumble if a federal appeals court decides this fall to uphold a lower court decision invaliding the entire Affordable Care Act, which would create a crisis for Mr. Trump and his party and become the central rallying cry for Democrats.

Immediate reaction from the drug industry was not favorable. Its main trade group, the Pharmaceutical Research and Manufacturers of America, called the legislation “radical.”

It added: “It would fundamentally restructure how patients access medicines by giving the federal government unprecedented, sweeping authority to set medicine prices.”

Jim Greenwood, the president and chief executive of another trade group, the Biotechnology Innovation Organization, said the legislation not only “abandons any pretense of allowing a free and fair market system to determine the value of prescription medicines,” but would also “surrender to foreign bureaucracies the power to dictate the value of medicines and the treatments available to America’s patients.”

“Lawmakers must reject this extreme proposal and work on real reforms that lower costs for patients and protect America’s leadership in medical innovation,” Mr. Greenwood said.

A version of this article appears in print on  , Section A, Page 18 of the New York edition with the headline: Pelosi Details Drug-Price Plan, Adding to a Stalled Debate. Order Reprints | Today’s Paper | Subscribe

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