House Committees Pass Budget Reconciliation Bills, But Difficult Negotiations Lie Ahead

September 17, 2021

Thirteen House committees have approved legislation that will be included in a reconciliation package this fall.  However, three moderate Democrats' opposition to a key provision enabling Medicare to negotiate drug prices means House leadership will need to make some changes before the full House votes on it.

Shortly after the failed vote in the House Energy and Commerce Committee, the Ways and Means Committee approved Democrats’ drug pricing proposal by a 24–19 vote, which keeps the budget reconciliation process moving.

It is unclear what changes will be made to the drug pricing provisions or other provisions to pass the package on the House floor.  One possibility could be to change the Ways and Means Committee bill, which ties Medicare drug pricing negotiations to a basket of international prices, to a basket of domestic prices instead.  This would reduce the revenue loss to the pharmacy supply chain and the negative impact on innovation, which the moderate Democrats are concerned about.

One thing is certain: the House will trim the legislation and the Senate will alter it even further.  Democrats need to pass a bill going into the 2022 mid-term elections, but what that means exactly remains elusive at this time.  Any four House members and any one Senator can disrupt the entire reconciliation process.

September 27th looming large:  Speaker Pelosi promised House moderates she would bring the Senate-passed $1.2 trillion infrastructure package to the floor by Sept. 27, but this deadline may have to slide—further complicating negotiations.

Outlook:  Congress will now focus on passing a continuing resolution to keep the government open and raise the debt ceiling while House reconciliation negotiations continue.  The Senate will most likely begin work on its budget reconciliation bill after the House passes its version.