Senate Majority Leader Chuck Schumer (D-N.Y.) announced Tuesday that Democrats have finally agreed on a plan to reduce the price of prescription drugs, potentially settling one of the biggest unresolved issues preventing passage of their Build Back Better legislation.

Im pleased to announce that an agreement has been reached to lower prescription drug prices for seniors and families in the Build Back Better legislation, Schumer said at a news conference. He added that the proposal received approval from a key holdout, Sen. Kyrsten Sinema (D-Ariz.), who subsequently released a statement confirming her support.

In that statement, Sinema cited negotiations she held with House Speaker Nancy Pelosi (D-Calif.), while also thanking Reps. Scott Peters (D-Calif.) and Kurt Schrader (D-Ore.) for the help. Pelosi had been pushing hard for a deal on prescription drugs; Peters and Schrader, like Sinema, had been resisting. If all of them are on board, then the deal most likely can pass the House as well.

Under the agreement, according to a summary that Democratic leadership circulated on Tuesday evening, the federal government would have power to regulate the prices of a small group of drugs, drawing from both Medicare Part B (the part of the program that covers drugs delivered in clinics, hospitals and other outpatient settings) and Part D (the part of the program that covers medications seniors buy and administer on their own, through pharmacies).

Another key feature of the plan are inflation caps basically, a limit on how much companies can raise prices year after year. The inflation caps would take effect next year, while the negotiation process would start with no more than 10 drugs for 2025 and increase to no more than 20 drugs starting in 2028.

The agreement also calls for redesigning the Part D benefit, in order to limit out-of-pocket costs for seniors at $2,000 a year, and it would restrict the price of insulin to no more than $35 per month, Schumer said.

Details And Impact Not Yet Clear

The impact of the plan on what individuals, employers and the government pay for drugs is not yet clear and wont be until full details are available and analysts have time to go through them, line by line. But nobody thinks the plan will regulate prices as aggressively, or deliver as much in savings, as advocates once hoped.

The original vision for this initiative was to model legislation on a 2019 bill under which the federal government would negotiate for at least 50 drugs a year, using a formula based on what countries overseas pay, with few restrictions on the kinds of drugs subject to negotiation. That plan also envisioned inflation caps that would deliver immediate, significant savings.

Together with a redesign of the Medicare Part D benefits, these provisions promised relief to millions of Americans who struggle with medication costs in the worst of cases, skipping doses in order to save money and then suffering more serious medical problems as a result.