CBO: Pelosi bill to lower drug prices saves Medicare $345 billion

A preliminary analysis from the nonpartisan Congressional Budget Office (CBO) finds that the core provision of Speaker Nancy PelosiNancy PelosiREAD: House impeachment managers' trial brief Desperate Democrats badmouth economy even as it booms Pelosi offers message to Trump on Bill Maher show: 'You are impeached forever' MORE’s (D-Calif.) signature bill to lower drug prices would save Medicare $345 billion between 2023 and 2029.

Democrats quickly touted the projected savings to show that their bill would effectively lower drug prices. 

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House Democrats are steaming forward on the bill, and hope to bring it to a vote in the House as soon as the end of the month. The measure is one of their top priorities, and one they have touted as showing they are focused on kitchen table issues even as they pursue an impeachment inquiry against President TrumpDonald John TrumpTrump's newest Russia adviser, Andrew Peek, leaves post: report Hawley expects McConnell's final impeachment resolution to give White House defense ability to motion to dismiss Trump rips New York City sea wall: 'Costly, foolish' and 'environmentally unfriendly idea' MORE

The analysis is preliminary and does not take into account the entire bill, but it does analyze its main provision, which would allow the secretary of Health and Human Services to negotiate lower prices on up to 250 drugs per year, with savings applied to both Medicare and people on private insurance plans. 

Republicans countered by pointing to another part of the CBO’s analysis, which found that the measure would reduce research and development of new drugs. The CBO estimate that drug companies’ revenues would be reduced by between $500 billion and $1 trillion over 10 years, leading to eight to 15 fewer new drugs coming to market over the next 10 years, out of about 300 total new drugs over that period.

“In the short term, lower prices would increase use of drugs and improve people’s health,” the CBO wrote. “In the longer term, CBO estimates that the reduction in manufacturers’ revenues from title I would result in lower spending on research and development and thus reduce the introduction of new drugs.”

The resulting effect is not certain, the agency wrote. “The overall effect on the health of families in the United States that would stem from increased use of prescription drugs but decreased availability of new drugs is unclear,” the CBO wrote. 

The bill would also likely result in lower premiums for people with private insurance, the CBO wrote, though it said it is still working on a more complete analysis of the bill. 

“This initial analysis proves that H.R. 3 will effectively rein in the soaring cost of prescription drugs and level the playing field for American patients,” three House Democratic chairmen, Reps. Frank Pallone Jr.Frank Joseph PalloneOvernight Health Care — Presented by That's Medicaid — Deal on surprise medical bills faces obstacles | House GOP unveils rival drug pricing measure ahead of Pelosi vote | Justices to hear case over billions in ObamaCare payments Obstacles remain for deal on surprise medical bills This week: House impeachment inquiry hits crucial stretch MORE (N.J.), Richard NealRichard Edmund NealTreasury watchdog to investigate Trump opportunity zone program House poised to hand impeachment articles to Senate House to vote Wednesday on sending articles of impeachment to Senate MORE (Mass.) and Bobby ScottRobert (Bobby) Cortez ScottHoyer: Democratic chairmen trying to bridge divide on surprise medical bills To support today's students, Congress must strengthen oversight of colleges Democratic lawmaker tears into DeVos: You're 'out to destroy public education' MORE (Va.) said in a statement, referring to the bill’s formal title. “Not only will H.R. 3 save consumers money, it will also provide tremendous savings to American taxpayers.”

In addition, an analysis of the bill from the federal Centers for Medicare and Medicaid Services' actuary found that the bill would save American households $158 billion over 10 years through lower premiums and out of pocket spending on drugs, and that total U.S. spending on health care would decline by $480 billion under the bill.

Rep. Kevin BradyKevin Patrick BradyTrump economic aide says new tax proposal could be unveiled this summer Hoyer: Democratic chairmen trying to bridge divide on surprise medical bills On The Money: House approves Trump USMCA deal in bipartisan vote | Senate sends .4T spending bill to Trump's desk | Why budget watchdogs are howling over the spending deal MORE (Texas), the top Republican on the Ways and Means Committee countered Friday: “CBO’s report confirms House Democrats’ ‘dictate or destroy’ price controls only serve to hurt the development of future cures and damage American innovation.”

Congressional Republicans have said they want to work with Democrats on much smaller drug pricing legislation, for example speeding the introduction of cheaper generic drugs. Rep. Greg WaldenGregory (Greg) Paul WaldenOvernight Energy: Schumer votes against USMCA, citing climate impact | Republicans offer details on their environmental proposals | Microsoft aims to be carbon negative by 2030 Republicans offer details on environmental proposals after Democrats roll out plan Overnight Energy: Cost analysis backing BLM move comes under scrutiny | Republicans eye legislation to rival Dems' climate plan | Report claims top global risks all climate-related MORE (R-Ore.), the top Republican on the House Energy and Commerce Committee, said there are other bills "already agreed to by Republicans and Democrats" that could pass. Republicans have denounced Pelosi’s measure, in contrast, as “socialist.”

Pelosi is still hoping that if Trump, who has railed against high drug prices, endorses the bill, it would put pressure on congressional Republicans. Still, the measure faces dim hopes in the Senate, where Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellHawley expects McConnell's final impeachment resolution to give White House defense ability to motion to dismiss Democrats file brief against Trump, 'the Framers' worst nightmare' Iran resolution supporters fear impeachment will put it on back burner MORE (R-Ky.) has vowed to block it.