Biden wants Congress to let Medicare negotiate drug prices

Politico Pro

August 12, 2021 9:03 am

President Joe Biden is pressing Congress to pass legislation allowing Medicare to negotiate drug prices and other reforms to slash costs.

Biden outlined his plan in Thursday remarks at the White House where he lamented rising costs for years-old medicines such as insulin, arthritis drugs and multiple sclerosis treatments. Besides Medicare negotiation, the president also is proposing caps on out-of-pocket costs as part of his Build Back Better agenda, a broad economic plan that includes tackling inflation and other consumer costs.

He already had endorsedallowing Medicare to negotiate drug prices in his 2022 budget proposal and pressed Congress for the change during an April joint speech to lawmakers. But while House Speaker Nancy Pelosi‘s negotiation bill, H.R. 3 (117), passed the chamber last year, it would need lockstep party support on both sides of the Capitol to make it to Biden’s desk now, and some moderates do not back the move.

“Let me start by acknowledging groundbreaking, life-saving work many pharmaceutical companies are doing; look no further than the vaccine manufacturing and delivery pandemic and save lives,” Biden said Thursday. “But we can make a distinction between developing these breakthroughs to jack up prices on a range of medications, or a range of everyday diseases and conditions.”

He also referenced working with industry on the Obama administration’s Cancer Moonshot initiative, when Biden was vice president. Critics have sometimes deployed that example to argue he is too pharma-friendly but Biden used it during his speech to underscore “unacceptable” pricing practices.

“[I] said if any one of you came up with a drug to cure a particular type of cancer, what do you think you should be able to charge? They said whatever the market would bear,” he said. “That often means a significant number of people can’t afford it under any circumstance, and they’ll die.”

Biden separately touted the federal government’s work with states and tribes to import cheaper medicines from Canada — even though HHS has not authorized any state importation plan since the Trump administration finalized the rule in September 2020. Critics, including Canadian officials, argue that importing medicines would not lower consumers’ costs and would only sap Canada’s supply. The Biden administration acknowledged the savings dilemma in a June court filing, noting that “although two proposals have been submitted to FDA, no timeline exists for the agency to make a decision.”

The president’s remarks, light on policy details, reflect the state of play on Capitol Hill, where lawmakers in the upper chamber haven’t yet figured out the particulars of their drug pricing plan and how much it will differ from the House’s HR.3.

A senior Senate Democratic staffer told POLITICO that senators led by Ron Wyden (D-Ore.) are spending the August recess working with the CBO and federal health agencies on the plan and shopping it to members, some of whom have been openly skeptical of the effort.

The president’s speech is especially welcome given that PhRMA is already ramping up its advocacy against reform with TV ads ahead of the bill’s release, the aide said. Biden’s support could give members the political cover they need to defy the industry.

Industry was swift to push back on the president’s remarks.

“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 CEO Steve Ubl said in a statement insisting that industry was happy to work with Congress on bipartisan approaches to lowering out-of-pocket costs.

On the campaign trail in 2020, Bidentook a more moderate approach to drug pricing than some other Democratic candidates but endorsed Medicare negotiation. Public support for the measure has swelled: Nearly nine in 10 Americans regardless of political affiliation back letting the government program negotiate prices according to June polling from the Kaiser Family Foundation.

The president meanwhile has withdrawn or delayed his predecessors’ most significant drug pricing plans, including a rule that would link certain Medicare payments to vastly lower costs in other countries. Congress also recently delayed by three years another Trump rule — eliminating rebates that drugmakers pay to pharmacy benefit managers — after the Biden administration pushed it back a year.