12:15 PM
May 09, 2019
 |  BC Extra  |  Politics & Policy

White House, Pelosi discussing Part D deal

Staffers representing President Donald Trump and House Speaker Nancy Pelosi (D-Ca.) are negotiating potential legislation that would allow CMS to negotiate Medicare Part D drug prices, and would establish a system of binding arbitration for certain drugs, according to sources who have been briefed by Pelosi’s office and the White House.

The negotiations are being conducted by Wendell Primus, senior policy adviser on budget and health issues to Nancy Pelosi, and Joe Grogan, director of the Domestic Policy Council.

Under the proposal, CMS would negotiate prices of Part D drugs that lack competition. Drug companies have little or no incentives to provide rebates or discounts for these products.

For drugs that have the largest costs to Medicare, if they fail to agree on a price, manufacturers and CMS would submit to binding arbitration by a third party.

Details, including the identity of the third party and thresholds for determining which drugs would be subject to binding arbitration, have not been finalized, sources told BioCentury.

It is far from certain that any deal hammered out between Primus and Grogan will be put into effect.

While cutting drug prices is one of the few areas of agreement between Republicans and Democrats, getting legislation enacted will be difficult and could be impossible.

If the White House and speaker's office come to an agreement, Pelosi would have to persuade a fractious Democratic party to back a deal that could be perceived as a win for the president. Trump would have to overcome longstanding opposition among Senate Republicans to Part D drug negotiation.

Powerful committee chairmen, including Rep. Frank Pallone (D-N.J.), chair of the House Energy & Commerce Committee, and Sen. Chuck Grassley (R-Iowa), chair of the Senate Finance Committee, are working on their own plans for reducing drug prices. They are unlikely to support a deal negotiated above their heads.

Instead, Pallone and Grassley are likely to incorporate any Pelosi-Trump agreement into broader legislation, further complicating efforts to achieve consensus between House Democrats and Senate Republicans.

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