by Joyce Frieden, Washington Editor, MedPage Today August 12, 2021
WASHINGTON — Congress must do more to lower the price of prescription drugs, President Biden said Thursday.
Biden noted that prescription drugs are “outrageously expensive” in the U.S., but he also gave credit to “the groundbreaking and life-saving work many pharmaceutical companies are doing. Look no further than the vaccines they’re manufacturing and delivering that are helping us beat this pandemic and save lives,” he said.
However, Biden continued, “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,” and he mentioned several drugs whose prices have risen dramatically over the years.
The president noted that he has already taken some “significant steps” on his own to lower drug prices, including issuing an executive order requiring the FDA to approve generic drugs more quickly. The order also requires the agency to work with states and tribes to allow less-expensive prescription drugs to be imported from Canada.
“Colorado estimates that their version of the drug importation program is going to save $35 million to $60 million a year for people in Colorado, cutting the prices down by more than 60% for the cost of the same drug,” Biden said.
“These things by themselves will be a great help, but to really solve the problem, we need Congress to act,” Biden said in remarks delivered in the East Room of the White House. He urged Congress to pass his Build Back Better plan, which among other things would give Medicare the power to negotiate prescription drug prices.
“Every other type of healthcare service — from how much a doctor can charge for a visit, to hospital visits, crutches, and wheelchairs — Medicare is allowed to negotiate and say, ‘We’ll pay no more … than the following amount for those things.’ The only thing Medicare is not allowed to negotiate are prices for prescription drugs. My plan gets rid of that prohibition,” he said.
“Congress is currently debating a more narrow vision, letting Medicare negotiate some of the most expensive drugs, particularly from those companies that don’t face competition for that drug,” the president continued. “We’re going to provide that competition through Medicare; Medicare is going to negotiate a fair price. Right now drug companies will set a price at whatever the market will bear.”
Instead, the administration is proposing that Medicare will negotiate a price “that reflects the cost of the research and development, and the need [to provide] for a significant profit, but that’s still affordable for consumers,” Biden said. “And by the way, if there was a significant amount that’s invested in it, and a fair price is very expensive, we’re going to have to figure out how society can provide for that drug that will save lives, so people can afford it.”
In addition, Biden said his plan would cap the amount seniors would pay out of pocket at $3,000 per year, and would allow drugmakers to only raise prices based on the rate of inflation “after it’s determined how much they’ve invested and what a healthy profit constitutes.”
The Build Back Better plan would lower prescription drug prices for all Americans, not just those on Medicare, Biden said. “An employer-based plan shouldn’t have to keep paying whatever the drug company demands. They should get access to the same drug at the same price as Medicare … Drug companies would have to sell their drugs to all distributors at the Medicare price or face up to a 95% excise tax. The savings for employers and employees would be billions of dollars a year.”
The savings to Medicare from paying these lower drug prices would pay for another part of Biden’s plan: adding dental, vision, and hearing benefits to Medicare. “At the same time, we can invest in medical breakthroughs that will also reduce the cost and save lives,” he said, referring to his plan to spend $6.5 billion to set up a division at NIH that would fast-track treatments for diseases such as cancer and Alzheimer’s.
“Right now, when Americans overpay for prescription drugs, too many pharmaceutical companies don’t use the profit nearly enough to innovate or research,” he continued. “Too many companies use it to buy back their own stock, inflate their worth, drive up CEO salaries and compensation, and find ways to box out the competition.”
“I’m not criticizing companies that aren’t prepared to spend billions of dollars on certain projects to research; I get it,” he added. “But if they’re not, we should.”
“This isn’t a partisan issue,” Biden concluded. “Alzheimer’s, diabetes, cancer — they don’t care if you’re Democrat or Republican. This is about whether or not you and your loved ones can afford prescription drugs you need. I look forward to Congress getting this done.”
Predictably, reviews of Biden’s remarks were mixed. “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,” Steve Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), 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.”
On the other hand, the Committee for Sustainable Rx Pricing (CSRxP) “applauds President Biden for his commitment to lowering prescription drug prices,” CSRxP Executive Director Lauren Aronson said in a statement. “Big Pharma’s egregious pricing practices have created a crisis of affordability and policymakers must deliver on repeated promises to hold the industry accountable and lower drug prices. The president’s speech adds to the unprecedented momentum for action and specifically highlighted several policies long-supported by CSRxP, including keeping price hikes below the rate of inflation and capping out-of-pocket costs for seniors.”
Joyce Frieden oversees MedPage Today’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy. Follow
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Congress Must Take Action to Lower Prescription Drug Prices, Biden Says – MedPage Today
by Joyce Frieden, Washington Editor, MedPage Today August 12, 2021