White House and Pelosi part ways on relief for drug prices

RICARDO ALONSO-ZALDIVAR

WASHINGTON (AP) — The White House on Tuesday signaled President Donald Trump's blunt thumbs-down to House Speaker Nancy Pelosi's plan allowing Medicare to negotiate drug prices. Her office's sharp retort: "Working people won't like it if he sells them out."

Despite the House impeachment inquiry, the White House and top aides to the California Democrat have been in regular contact on efforts to curb drug prices, a mutual objective and a top concern for Americans across party lines.

But a senior White House official told The Associated Press that the administration has concluded Pelosi's plan is "unworkable" and Trump will instead support bipartisan legislation pending in the Senate. The official spoke on condition of anonymity to discuss ongoing deliberations.

The falling out imperils chances for legislation this year, already seen as a long shot.

A recent study found more than half of seriously ill Medicare enrollees face financial hardships with medical bills, and prescription drug costs are the leading problem.

In a statement responding to the White House, Pelosi spokesman Henry Connelly said, "House Democrats are taking the bold action to negotiate lower drug prices that President Trump always claimed was necessary, and working people won't like it if he sells them out on one of the most important kitchen table issues in America right now."

The senior White House official said that while Trump is not ideologically opposed to Medicare negotiating prices for medicines, Pelosi's approach can't be quickly retooled.

Her bill would levy steep taxes on drugmakers who refuse to accept a Medicare price keyed to what's paid in other economically advanced countries. The White House official objected that Pelosi's bill is essentially structured to give Medicare the power to dictate prices, and pointed to its lack of Republican support.

Trump is backing a bipartisan bill from Sens. Charles Grassley, R-Iowa, and Ron Wyden, D-Ore.

That legislation would for the first time limit what seniors have to pay out of their own pockets for medications. It would also require drug companies to pay rebates to Medicare if they hike prices beyond the inflation rate.

Similar ideas are also in Pelosi's legislation, but she takes a more aggressive approach to inflation rebates and sets a lower out-of-pocket limit for Medicare recipients.

Under the legislation that created Medicare's prescription drug program, price negotiations are handled privately by insurers and their pharmacy benefit managers. The Grassley-Wyden bill does not grant Medicare negotiating power.

Pelosi's bill has cleared key committees and is headed for the House floor, where it's expected to pass on a party-line vote. The nonpartisan Congressional Budget Office has estimated it would save Medicare $345 billion over seven years, and Democrats want to use some of that to expand benefits.

Aides to the House speaker say that her bill would give Trump precisely what he had asked for as a presidential candidate, when he broke with other Republicans to back negotiating authority for Medicare. House Democrats even echo Trump's longstanding complaint that other countries where medications cost less are taking advantage of the U.S.

The White House says the administration is working with Grassley and Wyden on improving their bill, by adding special provisions to address the escalating cost of insulin, which is used to treat diabetes, and by exploring a monthly limit on out-of-pocket costs for Medicare recipients.

It's unclear if and when that bill would go to the Senate floor. The Congressional Budget Office estimates it would save Medicare $85 billion over 10 years.

Grassley's office said Tuesday that the senator spoke last week with White House officials, who underscored Trump's backing for the Senate bill.

"Growing support for the bipartisan Senate bill reflects the emerging consensus that it's the only path forward to lower prescription drug prices," said Grassley spokesman Michael Zona.