Jul 18, 2021 - Health

GOP joins Dems in taking on Big Pharma

A screenshot shows host Chris Wallace and Sen. Bill Cassidy during the taping of Fox News Sunday.

Sen. Bill Cassidy appears today on "Fox News Sunday." Via @atrupar/Twitter

Senators working to keep the bipartisan infrastructure deal alive are zeroing in on Medicare prescription drug rebate formulas to offset up to $60 billion of the $1.2 trillion package, people familiar with the matter tell Axios.

Why it matters: Targeting those funds puts the bipartisan infrastructure plan in competition with the $3.5 trillion, Democrat-only plan proposed by Sen. Bernie Sanders (I.-Vt.). It also assumes new money from altering complicated prescription drug formulas.

  • Bipartisan negotiators are looking at drug payments after Republicans backtracked on additional funding for the IRS, a move that would have raised an estimated $60 billion.
  • One source familiar with the negotiations cautioned that the final amount could be less than the $60 billion the bipartisan group thinks it can get from stepped-up IRS enforcement.
  • A conservative group, led by Marc Short, chief of staff for former Vice President Mike Pence, targeted GOP lawmakers for considering adding financing to IRS enforcement efforts. It's now dead in the bipartisan talks.
  • Democrats plan to revive it in their reconciliation package and seek an $80 billion IRS boost.

Driving the news: Senate Majority Leader Chuck Schumer (D-N.Y.) plans to force a preliminary vote on the bipartisan package Wednesday, but the so-called Group of 20 behind the measure is struggling with how to pay for their “hard” infrastructure plans.

  • “We’re competing with their $3.5-trillion plan. They want everything reasonable on their side, not helping us,” Sen. Bill Cassidy (R-La.) said, referring to Sanders' plan, on "Fox News Sunday."
  • “I just don't know how you have a cloture vote when you don't have the bill written, when you don't have the pay-fors established,” said Cassidy.

The big picture: Both the bipartisan bill and the $3.5 trillion reconciliation bill face significant obstacles.

  • The first would fund traditional infrastructure like roads and bridges; the second is focused on what Democrats call “human infrastructure,” including money for universal preschool, free community college and medical care.
  • Democrats have no margin for error in the Senate, and key centrists, like Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), haven’t publicly endorsed the $3.5 trillion cost of the reconciliation bill.
  • Republicans in the G20 who say they support the bipartisan deal, which includes $579 billion in new money for traditional infrastructure, could get cold feet if the Democrat-only bill gets too big. Their concern: too much spending in one year.

Go deeper: Sanders is looking at prescription drug formulas for two pots of money, which he expects will raise more than $600 billion, Axios reported last Thursday.

  • Roughly $500 billion will come from forcing pharmaceutical companies to negotiate their drug prices directly with Medicare.
  • And additional money — estimated at between $10 and $20 billion per year — could be counted if the Biden administration never implements changes proposed by the Trump administration.
  • They would alter payments from drugmakers to pharmacy middlemen.
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