Democrats reach a breakthrough deal on drug prices, as spending bill nears the finish line

House and Senate Democrats reached a breakthrough agreement on lowering prescription drug prices Tuesday, putting an end to one of the party’s thorniest disputes in their $1.75 trillion reconciliation bill.

“I’m pleased to announce that an agreement has been reached to lower prescription drug prices for seniors and families in the Build Back Better legislation,” Senate Majority Leader Chuck Schumer, D-N.Y., said at a press conference. “Fixing prescription drug pricing has consistently been a top issue for Americans, year after year, including the vast majority of both Democrats and Republicans.”

The Senate’s top Democrat added that the plan will grant the government power to regulate the prices of some of the most expensive drugs on the market and redesign the Medicare drug benefit so it limits out-of-pocket costs for seniors to $2,000 per year.

The last-minute deal surprised Democrats outside of leadership, in part because Medicare negotiation powers were not part of a framework agreement that President Joe Biden had released last last week, and which he had pitched to House Democrats as a done deal.

White House officials said the president’s framework contained only provisions Biden was confident he could get swing vote senators to agree to, and at the time, the Medicare deal wasn’t one them.

But Tuesday’s agreement has already won the endorsement of one of those senators, Kyrsten Sinema, a moderate Arizona Democrat, who had opposed earlier Medicare negotiation proposals.

“The Senator welcomes a new agreement on a historic, transformative Medicare drug negotiation plan that will reduce out-of-pocket costs for seniors – ensuring drug prices cannot rise faster than inflation – save taxpayer dollars, and protect innovation to ensure Arizonans and Americans continue to have access to life-saving medications, and new cures and therapeutics,” her office said in a statement Tuesday.

Sinema also specifically thanked two House Democrats, Reps. Scott Peters, Calif., and Kurt Schrader, Ore., for helping to design the compromise legislation. Like Sinema, Schrader and Peters opposed a plan earlier in the year to grant more sweeping negotiation powers to Medicare.

Tuesday’s announcement represents a win for party leadership, after weeks of struggling to win over a handful of holdouts on critical aspects of the broader $1.75 trillion plan.

It also briefly raised hopes across Capitol Hill that Democrats might be able to finalize a bill that could pass the House by week’s end. Earlier in the day Tuesday, House Speaker Nancy Pelosi, D-Calif., had said the party could reconcile its disagreements “by the end of the day” and vote to pass the safety net package within a matter of days.

A group of moderate Democrats later dashed those hopes, however, when the group said it would only support the Build Back Better bill after reviewing economic analysis from the Congressional Budget Office or the Joint Committee on Taxation. The nonpartisan budget office provides budget and economic information to lawmakers on prospective legislation.

Democratic Reps. Ed Case, Josh Gottheimer, Kurt Schrader, Stephanie Murphy and Jared Golden all wrote in a letter to Pelosi that they cannot vote for the bill without input from the CBO or the taxation committee. They also stressed that they will need at least 72 hours to review any bill’s final language.

Both the House and the Senate are scheduled to leave Washington for scheduled recess at the end of the week, and return Nov. 15.

Still, Democrats have a long way to go before sending the Build Back Better legislation to President Joe Biden’s desk. Sen. Joe Manchin, D-W.Va., remains skeptical of the size of the bill and has clashed with more progressive peers over certain Medicare expansions and climate initiatives.