Ways and Means subcommittee chairman Rep. Lloyd Doggett (D-TX) in 2017. | Chip Somodevilla/Getty Images Health Care Liberals worry Pelosi may pivot away from a bold drug price plan

A split between House Democratic leaders and rank-and-file members over how to lower drug prices is threatening the party's efforts tries to make good on one of its biggest campaign promises just weeks into the new congressional session.

Some progressive lawmakers and outside groups are concerned that aides to Speaker Nancy Pelosi are proposing to have a third party help decide the price of a drug through binding arbitration — a solution that falls short of the Democrats' 2018 campaign platform that promised direct government negotiations for medicines in Medicare Part D.


The dispute is focused on Pelosi’s senior health policy adviser Wendell Primus. He is deeply involved in crafting the policy's details and is searching for an approach that could both significantly lower drug prices and potentially win support from the Trump administration, according to lawmakers, the drug industry and health policy groups.

Two major concerns are emerging with his push for arbitration. Sources say Primus is limiting it to a select group of high-cost drugs, instead of developing a broader proposal for all medicines. Additionally, the arbitration process would be voluntary and nonbinding, meaning companies could opt out without consequence.

“I am concerned that arbitration is a little too narrow to get the job done,” said Rep. Lloyd Doggett (D-Texas), the chairman of the Ways and Means health subcommittee and sponsor of a newly introduced drug pricing bill that has more than 110 co-sponsors. “I’m concerned about passing the buck or shifting of the responsibility to the arbitrator. Who would arbitrate? And would this be such a narrow group of drugs that would be involved that we won’t see any significant impact?”

Doggett said he's concerned the drug industry would be able to game the arbitration process.

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One arbitration model in a 2008 Health Affairs paper by Harvard health policy experts Joseph Newhouse and Richard Frank, a senior official in ex-President Barack Obama’s health department, would either have the third-party arbitrator pick from price proposals offered by the government and drug manufacturer or propose a third price based on independent research.

Binding arbitration “puts patient access at risk to get lower prices. Drug corporations’ monopolies should be at risk never patient access,” said Alex Lawson, executive director of Social Security Works, one of the outside groups concerned about the proposal.

Rep. Mark Pocan (D-Wis.), a leader of the Congressional Progressive Caucus, which was to meet with Pelosi Thursday, downplayed Primus’ influence over the issue, signaling that the party’s increasingly powerful left wing will push hard for a sweeping drug price policy.

“I’m not worried what Wendell thinks,” he said. “When he gets elected to Congress, it’ll matter.”

Pocan pointed to the broad public support for giving the government power to limit price increases, arguing that Democrats’ vow to lower drug costs was a key driver in the party’s midterm election success and will be again in 2020.

“There will probably be some folks in the caucus who want to be more narrow, and I think the rest of us will advocate on behalf of our constituents,” he said in an interview. “This shouldn’t be a hard sell to people. If necessary, we can crank up people in districts to call their members.

Pelosi’s office declined to comment on binding arbitration. “House Democrats are looking at a variety of aggressive drug price negotiating mechanisms as we develop our flagship prescription drug price legislation,” spokesperson Henry Connelly said.

Critics are instead pushing a price negotiation bill from Doggett and Sen. Sherrod Brown (D-Ohio) that was introduced Thursday.

The measure tracks with Democrats’ campaign promise to allow government drug price negotiation in Medicare Part D. But it departs from past Democratic drug negotiation proposals that were predicted to generate little in the way of savings unless Medicare also restricted the medicines patients could access.

If drug companies refuse to negotiate in good faith, the bill allows Medicare to authorize generic drug companies to produce the medicine in question, even if the product has patent protection or government-granted marketing exclusivity. The brand-name drug company would be given a royalty if this occurred. Until the maker of generic drugs starts production, Medicare would be guaranteed a price that is the average of the cost paid for the medicine in other wealthy, developed European countries during any interim period while generic companies gear up manufacturing. Most other countries have government negotiations and get lower prices than the United States.

“It would be a total capitulation to pharma from what we can tell, to prefer a narrow and conservative binding arbitration model over [Dogett’s] bill,” said Peter Maybarduk, director of Public Citizen’s Access to Medicines Program. “We believe the public is clamoring for more muscular action,” he added, saying that Doggett’s drug pricing bill is clearly leading and where the Democratic caucus wants to go.

“Poll after poll shows that lowering drug prices is a top concern for the American people," Social Security Works' Lawson added. "They also show that maintaining access to needed drugs is equally important. ... Negotiating with licenses is the best and most popular way forward. It accomplishes both goals by directly negotiating lower prices without putting patients’ access in pharma’s greedy crosshairs.”

The disagreements are already stoking concerns the party is fumbling its chance to tackle drug costs, with some involved perceiving a lack of urgency from party leaders on the issue. Several members have spent years formulating a series of policy proposals, yet House Democrats have yet to articulate a clear plan of attack beyond assurances that it’s a top priority for leadership and for top Democrats on the Energy and Commerce Committee.

“It’s a work in progress at this point,” said Rep. Peter Welch (D-Vt.), who has introduced multiple drug pricing bills, including one giving Medicare broad leeway to negotiate prices. “There’s always concern about how long it’ll take. … We’re moving. My concern is that we get a specific outcome that lowers drug prices, and I don’t know how much time that’s going to take.”

Any drawn-out process could give Republicans an opening to introduce their own drug price reforms and begin to dictate terms of the debate.

“Energy and Commerce needs to, frankly, pick up the pace because we’re concerned they’re going to get preempted by Senate Republicans,” said one individual familiar with Democrats’ deliberations. “It is concerning we’re seeing such a slow-walking.”

But some lawmakers are signaling the Democrats will be deliberative and avoid rushing. “It will take a while,” Doggett said. He remained committed to exploring the range of ideas to see what generates the most support. “And hopefully out of the hearings we are doing and the various committees, we will be able to identify shortcomings as well as strengths.”

Energy and Commerce health subcommittee Chairwoman Anna Eshoo (D-Calif.) characterized her committee’s work as still in its early stages. But she defended taking a meticulous approach.

“You really need to know at some point what the traffic will bear,” she told POLITICO. “You can have a brilliant idea, thought out step by step, detail by detail, and if you don’t have enough votes, it doesn’t matter. It just doesn’t matter.”