Dems’ $80 Billion Deal With Drug Industry Survives Senate Vote

In this topsy-turvy health-care year in Washington, it was Senate Democrats who threatened to scuttle the deal Democratic leaders cut earlier this year with the drug industry to reduce forgo some $80 billion in revenue over the next decade.

But they couldn’t quite do it: An amendment that would essentially have undone the deal failed in the Senate Finance Committee this afternoon, by a vote of 13-10. All of the panel’s Republicans voted against the amendment, as did three Democrats including Max Baucus, the committee chairman.

The amendment, introduced by Florida Dem Bill Nelson, would have lowered the rate Medicare pays for prescription drugs for seniors who are eligible for both Medicare and Medicaid. Under the current system, the government pays for drugs for those patients at Medicare rates; under Nelson’s amendment, the government would have paid Medicaid rates, which are lower. That would have meant an $86 billion loss over 10 years for drug makers, according to Dow Jones Newswires.

But part of the deal the drug industry cut earlier this year with President Obama and other Democratic leaders was that further cuts wouldn’t be imposed on the industry. Under that deal, which is included in Baucus’s bill, drug makers would subsidize a big chunk of the drug costs now borne by seniors when they hit the “donut hole,” a spending range where prescription drugs aren’t covered by Medicare.

Bonus Nelson: Nelson landed on the front page of this morning’s New York Times, in a story that dug into his support for Medicare Advantage, a program that pays private insurers to provide coverage to some Medicare beneficiaries and has been targeted by other Dems for cost cuts.

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