President Biden on Thursday called on Congress to lower prescription drug prices by enacting a number of reforms, including allowing Medicare to negotiate with pharmaceutical companies.
“There aren’t a lot of things that almost every American can agree on, but I think it’s safe to say that all of us, whatever our background, our age or where we live, can agree that prescription drug prices are outrageously expensive in America,” Biden said.
He later added: “These prices have put the squeeze on too many families and stripped them of their dignity. We force people into terrible choices, between maintaining their health, paying the rent or the mortgage, putting food on the table.”
As Democrats look to include a number of health-care reforms and drug-pricing measures in their $3.5 trillion budget package, Biden and the White House outlined proposals that will sound familiar to anyone who’s been following the policy debate.
Biden wants Medicare to be able to negotiate certain drug prices and wants those Medicare prices to apply to private insurers as well. Biden also called for drugmakers to face penalties if they hike prices faster than inflation and for a cap on how much Medicare beneficiaries pay out-of-pocket for drugs each year. Those policies largely match what Democratic lawmakers are working on. Biden also endorsed a provision in drug-pricing legislation spearheaded by House Speaker Nancy Pelosi (D-CA) that would impose an excise tax of up to 95% on drug companies that back out of negotiations with Medicare.
Biden last month signed a sweeping executive order that sought to facilitate the importation of prescription drugs from Canada and boost less expensive generic drugs. It also ordered the Department of Health and Human Services to create a "comprehensive plan” to lower prescription drug prices and combat price gouging by August 23.
“These thing by themselves will be a great help,” Biden said Thursday. “But to really solve the problem, we need Congress to act.”
Drug companies push back: Unsurprisingly, the drug lobby panned Biden’s proposals. “Unfortunately, the policies the president outlined today would undermine access to life-saving medicines and fails to address an insurance system that shifts the cost of treatments onto vulnerable patients,” PhRMA president and CEO Steve Ubl said in a statement. “Many in Congress know that access to medicine is critical for millions of patients and Medicare is not a piggy bank to be raided to fund other, unrelated government programs. This is a misguided approach.”
PhRMA also pointed to a Kaiser Family Foundation poll that found that 65% of Americans oppose allowing Medicare to negotiate with pharmaceutical companies if it could lead to less research and development of new drugs or limit access to newer drugs.
Progressives may be disappointed, too: “While Biden struck a firmer tone and offered more specifics than he has before, his proposals still didn’t go as far as some progressives would have liked,” STAT News’s Rachel Cohrs and Lev Facher note. “When compared to his longstanding calls to allow Medicare negotiation, Biden’s proposal is limited in scope. It appears to apply only to drugs that don’t face generic competition. Those are likely the medications that account for the lion’s share of government and patient spending, but potentially a smaller list than previous proposals from progressive lawmakers.”
Biden said Thursday that drug companies should still be able to make a “significant profit” from negotiated prices and acknowledged that many pharmaceutical companies are doing “groundbreaking and lifesaving work.” But, he said, “We can make a distinction between developing these breakthroughs and jacking up prices on a range of medications for a range of everyday diseases and conditions.”
Why it matters: While the policies may not be new, Biden’s speech put some more presidential muscle behind them. “There had been some doubts as to Biden's commitment to drug pricing earlier this year when he left it out of his American Families Plan,” The Hill’s Peter Sullivan writes, “but the speech on Thursday provided a new jolt of energy to the issue.” Whether that energy is enough to get the proposals through Congress remains the key question.