$8.3 billion coronavirus emergency bill deal reached

The House is expected to vote on the bill to respond to the COVID-19 illness outbreak Wednesday

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Posted March 4, 2020 at 11:54am

House and Senate negotiators have agreed on a nearly $8.3 billion emergency aid package to help contain and treat the novel coronavirus-caused respiratory illness that has resulted in the deaths of nine individuals in the U.S. and thousands worldwide.

The House is expected to vote on the emergency supplemental appropriations bill to respond to the COVID-19 illness outbreak on Wednesday, according to a notice sent to members from Majority Leader Steny H. Hoyer, D-Md.

Negotiators spent the night trading offers and seeking to resolve the biggest sticking point: how to apply government purchasing standards dictating that contracting officers "shall" obtain supplies and services — in this case, products like drug treatments, test kits and eventually vaccines — at "fair and reasonable prices."

[Doubts remain about timetable for new coronavirus tests]

"We're very close," according to a House Democratic aide familiar with the negotiations, who spoke on condition of anonymity to discuss private conversations. But Republicans argued Democrats were still insisting on pricing language that would stifle incentives to invest in drug research and development.

Senate Appropriations Chairman Richard C. Shelby, R-Ala., appeared frustrated about the pace of the talks, however.

"We're at a standstill at the moment. We've been thinking for the last couple of days we're this close and we are, but we're not there yet," he said off the Senate floor Wednesday. "I can't untangle it. Our people were up most of the night. That's probably the hangup right now. We don't understand why Democrats are playing politics with the American people."

Speaking on the Senate floor, Majority Leader Mitch McConnell, R-Ky., said negotiations "appear to be at the five-yard line." But he charged that Democrats had introduced "a last-minute demand that this funding legislation also test drive some untried, untested and controversial parts of their Medicare for All proposal that relate to the pricing of new drugs and innovations."

[They’re doctors. They’re politicians. They were using hand sanitizer before it was cool]

The yet-to-be-released supplemental package, likely to total around $8 billion, is expected to provide funds for bulk purchases of such supplies to make available to providers. Republicans said they have no problem applying the "fair and reasonable" standard to direct government buys, but they balked at what they characterized as a Democratic push to apply the standard to negotiations between private insurers and drug companies.

The standard would also presumably apply to Medicare, the federal insurance program for seniors who are viewed as the most at-risk population during the current outbreak. Most of the U.S. deaths so far have been individuals in their 70s and 80s.

Medicare is barred from negotiating prices directly with drug companies, though a House-passed bill would change that and also allow private insurers to take advantage of those prices. Most Medicare drugs are paid for based on a formula that relies on an average sales price, or are paid for by private insurance plans who negotiate for their own programs, which the government subsequently pays to cover Medicare beneficiaries.

Democrats have suggested in recent weeks that the Department of Health and Human Services should use its leverage with drugmakers for vaccines and treatments. In a Feb. 20 letter from House Democrats led by Jan Schakowsky of Illinois, they urged the administration to consider pricing when negotiating with drug companies over licenses to continue developing patented discoveries by the National Institutes of Health.

If the administration grants an exclusive license, HHS should “implement requirements that a vaccine or treatment be made available at an affordable price,” the letter said. The letter also suggested that HHS should strip a company’s patent and grant it to another company if a price is too high: “You should also allow HHS to intervene if a manufacturer prices a COVID-19 vaccine or treatment at an excessive level.”

'Very close'?

Senate Minority Leader Charles E. Schumer, D-N.Y., who followed McConnell on the floor, didn't directly address the Republican's comments on drug prices.

He said negotiators are "very close" to a deal, rattling off some of the funding components he said would be in the package including $500 million to purchase and distribute pharmaceuticals, masks, protective equipment and other medical supplies to state and local health officials and hospitals. Other items, according to Schumer, include:

  • $350 million for "hotspots," or areas particularly affected by the outbreak.
  • $100 million for community health centers, training and beds.
    In all, Schumer said, there is $950 million to reimburse states and localities for their virus response efforts.

Agencies to receive funding in the bill, the total topline of which Schumer said was still in flux, include HHS, including the Centers for Disease Control and Prevention and the Food and Drug Administration; U.S. Agency for International Development and more.

Tying the Democrats' stance on drug pricing to a Medicare for All government-run proposal may be an attempt by McConnell to link their position to that of Sen. Bernie Sanders, the self-styled "democratic socialist" whose presidential campaign appears to be flagging after the Super Tuesday primaries.

The House Democrats' drug bill is narrowly focused on pharmaceutical prices, though Sanders, a Vermont independent, includes drug price negotiation in his sweeping single-payer proposal. Sanders has only 14 Senate cosponsors for his Medicare for All bill, or less than a third of the Democratic Caucus, though the House version has more than half the caucus in that chamber on board.

Democrats have strongly disputed the notion they are seeking to tack broader drug price controls onto the emergency coronavirus aid package. They argue they are simply trying to make it affordable for any individual to be tested, treated and ultimately vaccinated against COVID-19.

House Energy and Commerce Chairman Frank Pallone Jr., D-N.J., said Tuesday night he didn't know why Republicans were objecting to "fair and reasonable prices" for drug and vaccine purchases.

Senators said Tuesday that the chamber could act quickly after the House passes the measure, possibly by unanimous consent, sending the package to President Donald Trump's desk before the end of the week.

Lindsey McPherson and Andrew Siddons contributed to this report.