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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 PelosiPelosi: 'No intention' of abandoning Democrats' infrastructure goals Senate investigation of insurrection falls short Ocasio-Cortez: 'Old way of politics' influences Manchin's thinking 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 TrumpBiden prepares to confront Putin Biden aims to bolster troubled Turkey ties in first Erdoğan meeting Senate investigation of insurrection falls short 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 PalloneIntercept bureau chief: Democrats dropping support of Medicare for All could threaten bill's momentum House Democrats reintroduce road map to carbon neutrality by 2050 House Democrats criticize Texas's 'shortcomings in preparations' on winter storms MORE (N.J.), Richard NealRichard Edmund NealRepublicans open new line of attack on IRS Ireland, loved by Biden, is obstacle to tax deal Bottom line MORE (Mass.) and Bobby ScottRobert (Bobby) Cortez ScottVirginia attorney general survives primary challenge OVERNIGHT ENERGY: Biden suspends Arctic oil leases issued under Trump |  Experts warn US needs to better prepare for hurricane season | Progressives set sights on Civilian Climate Corps Progressives set sights on Civilian Climate Corps program: exclusive 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 BradyRepublicans open new line of attack on IRS To address labor shortages, Congress should try a return-to-work bonus Ireland, loved by Biden, is obstacle to tax 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 WaldenLobbying world Give Republicans the climate credit they deserve Fox hires former GOP lawmaker Greg Walden as political consultant 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 McConnellWhat the Democrats should be doing to reach true bipartisanship Democrats mull overhaul of sweeping election bill McConnell seeks to divide and conquer Democrats MORE (R-Ky.) has vowed to block it.