Biden Calls for Medicare to Negotiate Prices for 50 Prescription Drugs Annually

In his State of the Union address on Thursday, President Joe Biden announced a proposal to increase the number of prescription drugs subject to price negotiations by the federal Medicare program. The current target of 20 medicines would be raised to at least 50 drugs each year if the proposal is approved. The initiative is part of Biden's efforts to make medicines more affordable for seniors and address the issue of rising drug prices in the United States.

Expanding Medicare's Negotiation Scope

The White House released a fact sheet outlining the new health-care policy proposals, which include expanding the scope of Medicare's ability to negotiate drug prices. The proposal aims to allow Medicare to negotiate prices for essential drugs used in treating heart disease, cancer, and diabetes, among others, to ensure that seniors have access to more affordable medications. Neera Tanden, the president's domestic policy advisor, emphasized that this change is not only a fiscal strategy but also a critical step in saving lives and providing seniors with much-needed financial relief.

Impact on Pharmaceutical Industry

The President's push for expansion in the number of drugs eligible for negotiations with Medicare is expected to face resistance from the pharmaceutical industry. Amid a legal battle between the Biden administration and several drugmakers regarding price negotiations, the proposal is likely to intensify the rift. Despite early wins in legal disputes this year, the industry is seeking to elevate the matter to the Supreme Court, pointing to escalating tensions over the issue.

Budget Implications and Future Prospects

The White House disclosed that the proposed budget would slash federal spending by $200 billion, potentially enabling Medicare to negotiate prices for a higher number of drugs and expedite the negotiation process for more medicines. While the exact timeline for reaching the target of 50 drugs per year was not specified, a senior administration official stated that the President is eager to collaborate with Congress on the proposal's finer details. The official expressed confidence in the current system's efficacy and its potential to reduce drug prices for the American populace.

Additional Health-Care Policy Proposals

Besides the expansion of Medicare's negotiation capabilities, President Biden outlined other key measures, such as capping Medicare copayments at $2 for common generic drugs and extending the $2,000 cap on out-of-pocket drug costs to all private plans. Moreover, the President seeks to broaden a provision of the Inflation Reduction Act that obligates drugmakers to pay rebates to Medicare when their prices surge faster than inflation. This extension would encompass commercial drugs in addition to those sold to Medicare, further tightening regulations on drug pricing across the board.