President Joe Biden speaks during an event at the National Institutes of Health in Bethesda, Maryland, December 14, 2023.
Chris Kleponis | Bloomberg | Getty Images
President Joe Biden said Wednesday that the federal Medicare program must negotiate prices for at least 50 prescription drugs each year, up from the current goal of 20 drugs.
That's one of several new health care policy proposals Biden will outline during his State of the Union address on Thursday, according to a fact sheet released by the White House on Wednesday. Many of these efforts are aimed at expanding parts of the Inflation Reduction Act that aim to make medications more affordable for seniors and could take a bite out of the pharmaceutical industry's profits.
“Medicare should not be limited to negotiating only 20 medications per year. Instead, the president is proposing that Medicare could negotiate prices for the key medications seniors depend on, such as those used to treat heart disease, cancer and diabetes.” read the fact sheet.
Biden has made lowering US drug prices a key pillar of his healthcare agenda and 2024 re-election platform. But the fate of his new proposals will rest in the hands of a divided Congress, making it highly uncertain whether they will be passed into law .
The president's call to increase the number of drugs eligible for negotiations with Medicare is likely to face the heaviest pushback from the pharmaceutical industry.
The Biden administration is already locked in a bitter legal battle with several drugmakers over the talks. The government has made early wins in two separate cases this year, but the industry is aiming to escalate the issue to the Supreme Court.
The Centers for Medicare and Medicaid Services started the negotiating process last fall when it unveiled the first 10 drugs that are in price discussions with Medicare. Negotiations on these drugs will end this fall and the new prices will come into effect in 2026.
After the first round of talks, Medicare can negotiate prices for an additional 15 drugs that will go into effect in 2027 and another 15 drugs that will go into effect in 2028. Under the current structure, the number will increase to 20 negotiated drugs per year, starting in 2028. 2029.
Last year, Biden indicated he wanted more drugs to be negotiated. Wednesday marks the first time his government has specified a higher target.
The change will “not only save taxpayers billions of dollars, but more importantly, it will save lives and give seniors the critical breathing space they need,” Neera Tanden, who serves as the president's domestic policy adviser, said during a phone call with reporters Wednesday. .
The president's budget cuts federal spending by $200 billion, according to the White House fact sheet. That could increase the number of drugs Medicare can select for negotiation and bring more drugs into the negotiation process earlier.
The White House did not announce whether the number of drugs would gradually increase to 50 after several years under the proposal, or whether that new number would apply starting in 2029. A senior administration official told reporters Wednesday that the president looks forward to working with Congress. about the details of the proposal.
“We've built a system that we know will work and deliver lower prices to the American people, and we believe we can scale it,” the administration official said.
Among the other policy proposals are moves to limit Medicare copayments to $2 for common generic drugs and to expand the $2,000 limit for out-of-pocket drugs outside of Medicare to all private plans.
Biden also wants to expand another provision of the Inflation Reduction Act, which requires drug makers to pay rebates to Medicare when their drug prices rise faster than inflation. The president wants this policy to apply to commercial drugs, not just those sold to Medicare.