Prescription-Drug Price Cuts Set to Be Left Out of White House Proposal

Biden will detail roughly $1.8 trillion antipoverty plan during a speech to Congress later this week

Negotiating the price of drugs would save the government roughly $456 billion over 10 years, according to a Congressional Budget Office estimate.

PHOTO: PATRICK T. FALLON/AGENCE FRANCE-PRESSE/GETTY IMAGES
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WASHINGTON—The White House isn’t expected to include a measure aimed at lowering the price of prescription drugs in its coming antipoverty package, according to people familiar with the matter, in an omission likely to disappoint top Democrats on Capitol Hill.

President Biden will detail the roughly $1.8 trillion proposal during a speech to Congress later this week, rolling out another major spending plan weeks after he released a $2.3 trillion infrastructure plan. While officials are still finalizing the plan, it is set to include funding for child care, universal pre-kindergarten and tuition-free community college, among other measures.

The new White House plan is also expected to include money for supporting Affordable Care Act programs, according to the people familiar with the plan. Democrats have been pushing to extend recently approved subsidies for people who buy ACA health plans, which lowered payments for almost 14 million people now insured on the individual market.

During a press briefing Monday, National Economic Council Director Brian Deese declined to comment on whether the plan would address prescription-drug prices.

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“I am not going to confirm whether or not that is in,” Mr. Deese said. The rising cost of prescription drugs is “something that [Mr. Biden] continues to focus on and prioritize, but I’m going to let him speak to those issues in the speech,” he said.

House Speaker Nancy Pelosi (D., Calif.) has been lobbying the White House to propose empowering the federal government to negotiate drug prices in Medicare, saying in a statement last week that it was a “top priority for House Democrats” for drug pricing to be in the plan. Democrats reintroduced their legislation last week that allows Medicare to negotiate prices and make those prices available to commercial healthcare plans.

Negotiating the price of drugs would save the government roughly $456 billion over 10 years, according to a Congressional Budget Office estimate, and the measure is broadly popular with voters in both parties.

But disagreements among Democrats about how to use the savings generated by drug-price negotiation has complicated its path forward. While Democratic leaders like Mrs. Pelosi indicated they want to put that money toward reducing costs for people getting healthcare through the ACA, other Democrats have proposed using it to expand eligibility for Medicare.

Democrats in both the House and Senate have recently encouraged the White House to allow drug-price negotiation, reduce the age of eligibility for Medicare below 65 and expand its benefits so it includes dental and vision care.

"We write to ask that, as part of the American Families Plan, you propose reducing the Medicare eligibility age, expanding Medicare benefits to include hearing, dental, and vision care, implementing a cap on out-of-pocket expenses under traditional Medicare, and negotiating lower drug prices,” a group of 17 Democratic senators including Bernie Sanders (I., Vt.) wrote to the White House in a letter Sunday.

Pharmaceutical companies have staunchly opposed Medicare negotiating the cost of prescription drugs.

On several fronts, aspirations among Democrats on Capitol Hill for the White House package are set to come up short. The White House is expected to propose a temporary extension of an enhanced child tax credit, rebuffing Democratic demands for a permanent extension. Some Democratic aides are also expecting that a proposal to overhaul unemployment insurance won’t end up in the proposed plan.

The White House will also likely face pushback on the plan’s proposed tax changes, which are expected to increase taxes on capital gains for people making more than $1 million, adjust how capital gains are taxed at death, and raise the top marginal income rate. Democrats who represent areas with many high-income individuals may have concerns about how capital-gains taxes are changed in particular.

Mr. Deese defended the president’s plans on the capital-gains tax Monday, emphasizing that the president’s proposal would only impact those making more than $1 million a year, which he said would mean 0.3% of taxpayers. He said the changes would fund investments in children and would “equalize the treatment of ordinary income and capital gains.”

—Catherine Lucey contributed to this article