Shortly after Schumer's announcement, House Speaker Nancy Pelosi, D-Calif., endorsed the deal and said committee leaders are "drafting the legislative text to reflect this important agreement."

An outline of the most recent policy shared by the White House on Tuesday night would empower Medicare to negotiate the cost for 10 of the most expensive drugs by 2025 and 20 drugs per year by 2028, while carving out exceptions for small biotech companies. Only drugs that have passed their initial exclusivity periods — nine years on the market for some drugs and 12 for others — would be eligible for negotiation, and the government can use an excise tax to force pharmaceutical companies to the bargaining table.

The deal is likely to limit drug companies' price hikes to the 2021 inflation rate, not the far lower 2016 rate initially supported. These inflation caps would apply to people on private insurance plans as well as Medicare and start at the beginning of next year. Seniors on Medicare would have a limit of $2,000 on what they pay out of pocket for medication.

The Pharmaceutical Research and Manufacturers of America called the policy "disastrous" in a statement, claiming it "threatens innovation and makes a broken health care system even worse."

The backing of all 50 Senate Democrats for the new drug pricing compromise allows them to settle one of the thorniest outstanding issues in the nearly $2 trillion spending package the party is racing to pass in the coming weeks. The House Rules Committee could take up the text of the new drug pricing deal as early as Wednesday.

Read more: 

• HHS unveils plan to directly negotiate Medicare pharmaceutical prices
• Legislation to control drug prices advances from committee to full Senate
• Bringing down drug prices: States target PBMs