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Dems hatch plan to pay for soft infrastructure with renegotiated drug prices

Senate Democrats have a new pay-for to finance a "soft" infrastructure bill: renegotiating Medicare prescription drug prices to save $600 billion — setting up a battle between progressives and well-capitalized drug companies.

Why it matters: By targeting pharma, Democrats are opening up a funding stream President Biden didn't initially include in his $4 trillion Build Back Better agenda. It relied on hiking taxes on corporations and Americans earning over $400,000.


  • Democrats also pick a fight with an industry prepared to spend millions to fend off attempts to alter its lucrative reimbursement rates.
  • Using drug-price savings to finance an already complex legislative package adds another powerful player to a game with no margin for error — complicating final passage of the legislation.

What they are saying: “It's time that the pharmaceutical industry realizes that the federal budget is not a cow to be milked,” Sen. Elizabeth Warren (D-Mass.) told Axios.

  • Sen. Bernie Sanders (I-Vt.), chair of the Senate Budget Committee, not only confirmed the $600 billion figure but suggested it was slightly higher.
  • "I am definitely in favor of saving money from pharmaceutical drug prices," said Sen. Joe Manchin (D-W.Va.). “I think Medicare should be competitive. It’s bullshit that Medicaid is and Medicare is not. That doesn’t make any sense at all.”
  • The federal government already exerts its considerable market power to negotiate down Medicaid drug prices.

The big picture: Renegotiating Medicare drug prices has long been a goal of Democratic politics, but the industry has successfully thwarted efforts to cut its profits.

  • In May, the path ahead for the House’s drug pricing bill — HR 3, the technical name for a measure allowing Medicare to negotiate prices — suffered a blow when 10 centrist Democrats signaled their opposition in a letter to Speaker Nancy Pelosi (D-Calif.).
  • In the Senate, any bill would face an even heavier lift, because it would require the support of all 50 Democrats.

Driving the news: Democrats are proceeding with a two-track infrastructure process: a $579 billion infrastructure "hard" package to pay for roads and bridges, and a Democrat-only, $3.5-trillion, tax-and-spending plan covering other concerns like climate change and child care.

  • Biden paid Senate Democrats a lunchtime visit Wednesday to sell both packages. "We’re going to get this done," he later told reporters.
  • Democrats working on the bipartisan component insist they're closing in on a deal, Axios' Alayna Treene reports.
  • "I am optimistic that we can resolve the remaining issues and be in a place for floor action next week," Sen. Chris Coons (D-Del.) said.
  • Sen. Jon Tester (D-Mont.), a key negotiator, echoed the same timeline.

Between the lines: The industry is counting on Democrats like Sen. Bob Menendez (N.J.), whose state is home to many drug companies, to fend off any challenges. Menendez was noncommittal.

  • "I got to look at the whole package," he told Axios.
  • "They will be at the table and participate in some way. What this is, and what’s the amount? That’s an open question."
  • His Democratic colleague from New Jersey, Sen. Cory Booker, appeared more open to the proposal.
  • "It’s an aberration of the free market not to be able to negotiate for drug prices," Booker told Axios.

American Carissa Moore wins first-ever women's Olympic gold in surfing

Team USA's Carissa Moore won gold in the first-ever Olympic women's surfing final, at the Tokyo Games on Tuesday.

The big picture: Brazil's Italo Ferreira won the gold medal in the inaugural men's Olympic surfing contest. The finals were brought forward a day due to the threat of Tropical Storm Nepartak.

Editor's note: This a breaking news story. Please check back for updates.

Activist Tong Ying-kit found guilty of terrorism in first Hong Kong security law trial

Tong Ying-kit, the first person to be charged and tried under Hong Kong's national security law was found guilty of terrorism and inciting secession by three judges Tuesday, per Bloomberg.

Editor's note: This a breaking news story. Please check back for updates.

Naomi Osaka eliminated from Olympic tennis tournament in Tokyo

Tennis superstar Naomi Osaka was eliminated from the Olympics after losing her Tokyo tennis tournament match 6-1, 6-4 in the third round to Czech Marketa Vondrousova on Tuesday.

Editor's note: This a breaking news story. Please check back for updates.

Extreme drought pushes 2 major U.S. lakes to historic lows

Two significant U.S. lakes, one of which is a major reservoir, are experiencing historic lows amid a drought that scientists have linked to climate change.

What's happening: Lake Powell, the second largest reservoir in the U.S., has fallen 3,554 feet in elevation, leaving the crucial reservoir on the Colorado River, at 33% capacity — the lowest since it was filled over half a century ago, new U.S. Bureau of Reclamation data shows.

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North and South Korea restart hotline and pledge to improve ties

North and South Korea's leaders have pledged to improve relations and resumed previously suspended communication channels between the two countries, per Reuters.

Details: South Korean President Moon Jae-in and North Korean leader Kim Jong-un agreed to "restore mutual confidence and develop their relationships again as soon as possible," South Korea's Blue House spokesperson Park Soo Hyun said in a televised briefing, AP notes.

  • This followed an exchange of letters between the two leaders since April.

Go deeper: Kim Jong Un says prepare for "dialogue and confrontation" with U.S.

Editor's note: This a breaking news story. Please check back for updates.

U.S. teen Lydia Jacoby wins Olympic gold medal in 100m breaststroke at Tokyo Games

Team USA's 17-year-old swimmer Lydia Jacoby has won the Olympic gold medal in the women's 100-meter breaststroke at the Tokyo Games.

Of note: The Alaskan is the first American woman to win an Olympic gold medal in Tokyo, and she beat Lilly King into second place.

Editor's note: This a breaking news story. Please check back for updates.

Pelosi expected to extend proxy voting as Delta variant surges

House Speaker Nancy Pelosi (D-Calif.) is expected to extend proxy voting through the fall — and potentially until the end of the year — Democratic lawmakers and aides tell Axios.

Why it matters: The spread of the Delta variant has alarmed both members and staffers anxious about interacting with the unvaccinated. Pelosi’s anticipated move — continuing an emergency COVID-19 measure enacted last year so lawmakers could vote remotely — is aimed at allaying those concerns.

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Jan. 6 panel to paint haunting scene of Capitol attack with graphic footage

The Jan. 6 select committee will paint a haunting picture of what unfolded during the attack on the Capitol during its first public hearing on Tuesday, Axios is told.

Why it matters: The nine-member panel will not only hear from four police officers on the grounds that day, but show graphic video footage similar to the chilling 13-minute video Democrats aired during Donald Trump's second impeachment trial.

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