WASHINGTON -- Democrats have targeted pharmaceutical profits as a means of raising revenue as part of the debt ceiling deal, Rep. Chris Van Hollen (D-Md.), the top Democrat on the House Budget Committee, said Friday.
Drugmaker profits were protected as part of a deal between Senate Democrats, the White House and Big Pharma to ease health care reform passage. That deal expressly expired upon passage of the health bill, however, leaving pharma vulnerable -- or at least as vulnerable as a deep-pocketed interest group with powerful friends on Capitol Hill can be.
The pharmaceutical industry, during the health care debate, was able to protect profits it makes from government rebates and by selling exorbitantly priced drugs to Medicare beneficiaries. Democrats would go after both pools of money.
"The proposals that we've put on the table have to do with rebates for the pharmaceutical industry," Van Hollen told HuffPost. "The idea of giving Medicare negotiating authority and going to the same rebate policy that was in place in 2005, yeah, those are things that we've actually proposed."
HuffPost asked if Republicans were open to the pharmaceutical proposal. "I don't want to characterize what happened in the talks, but that has been part of the conversation," he said.
A GOP source confirmed that Democrats had put the proposal on the table and that Republicans were continuing to look at it.
Changes to rebate policies in both Medicaid and Medicare could raise billions of dollars. A House bill in the last Congress -- reintroduced by Rep. Henry Waxman (D-Calif.) in this session -- would have required the industry to return some of its Medicare Part D money to the government. The rebate proposal would have saved $63 billion over ten years, according to an analysis done at the time by the Congressional Budget Office.
Karl Uhlendorf, a vice president for the Pharmaceutical Research and Manufacturers of America (PhRMA), said that PhRMA has been working the Hill to make its case, aware that some Democrats have been eyeing the industry's revenue.
"What we've been focusing on is the way in which Part D has been a success. It's provided seniors and disabled Americans with unprecedented access to medicines at an affordable price," Ulendorf said, noting that the program has come in at a price tag roughly 40 percent smaller than initially projected.
House Minority Leader Nancy Pelosi (D-Calif.) has long been supportive of raising additional revenue from prescription drug producers and opposed the White House deal. Hitting the pharmaceutical industry could help win over some of the House democrats that John Boehner and President Obama will need to gain favor for whatever bargain they come up with.
House Republicans may be particularly receptive to the proposal after the drug lobby worked hand in glove with the White House to pass health care reform and followed that partnership by heavily backing Democrats in the 2010 elections -- contributions that haven't been forgotten.
Van Hollen said that Democrats were not considering pushing for allowing for re-importing cheaper drugs from Canada or another foreign country, as the proposal -- valid as it might be -- "doesn't necessarily generate income from a budget perspective."
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