President Joe Biden said Wednesday that Medicare should negotiate prices for at least 50 prescription drugs each year — up from the president’s current target.
“Medicare should not be limited to negotiating just 20 drugs per year,” the White House said in a fact sheet released ahead of Biden’s State of the Union address Thursday earlier reported on by CNBC.
“The President is proposing that Medicare be able to negotiate prices for the major drugs that seniors rely on, like those used for treating heart disease, cancer and diabetes,” the fact sheet added.
The effort expands upon parts of the Inflation Reduction Act, per CNBC, which provides financial aid to the more than 65 million Americans that are enrolled in Medicare, according to the Centers for Medicare & Medicaid Services (CMS).
Biden — who has been getting battered in the polls over discontent about state of the US economy — has made lowering US drug prices a key pillar of his reelection campaign in the walkup to Election Day in November.
The effort began in August 2022, when he initially signed the Inflation Reduction Act into law, which put a $2,000 out-of-pocket cap on prescription drug costs and reduced health insurance premiums for Medicare beneficiaries.
The move “cuts federal spending by $200 billion, increasing the number of drugs Medicare can select for negotiation and bringing more drugs into the negotiation process sooner, and other reforms,” the White House said.
According to the CMS, the legislation also put rebates on drug companies that raise their prices faster than the rate of inflation.
Though these parts of the Inflation Reduction Act have been celebrated for Medicare members — most of whom are over the age of 65 — Biden’s new proposals to increase the number of drug prices that can be negotiated annually will likely be met with scrutiny from the pharmaceutical industry.
Biden’s administration has already been in bitter legal fights with multiple drugmakers over the potential move, according to CNBC.
The president was recently handed an early win in a case where pharmaceutical giant AstraZeneca challenged Medicare’s new power to negotiate select costly prescription drugs with manufacturers.
Merck, Johnson & Johnson and Bristol Myers Squibb have all also filed against the price talks, with decisions related to those cases expected to come down next year, CNBC reported.
If rulings are handed down in favor of the Biden administration, the cases could eventually be escalated to the Supreme Court.
Meanwhile, the CMS has already kicked off the negotiation process.
It decided on 10 drugs subject to price talks with Medicare last fall, according to CNBC, and they include AstraZeneca’s Farxiga — the firm’s top pharmaceutical product by revenue that’s used to treat Type 2 diabetes, chronic kidney disease and heart failure.
The negotiations for those medications end this fall, with new prices going into effect in 2026.
After the initial round of talks, Medicare can negotiate prices for another 15 drugs which, once decided upon, will go into effect in 2027, according to CNBC.
An additional 15 medications beyond that will boast new prices come 2028.
Under the current structure, each round of discussions would increase the medications in question to 20 per year starting in 2029. However, Biden wants that number to gradually to 50 within five years’ time.
Though Biden has said that he wants more prescriptions to be subject to price negotiations, Wednesday was the first time that his administration specified a higher target number, according to CNBC.
