Joe Biden Launches Initiative to Lower Prescription Drug Prices, Transforming Medicare
President Joe Biden is set to launch a historic initiative aimed at lowering prescription drug prices, which could have a significant impact on the lives of everyday Americans. Despite the initiative consistently polling well, its existence has largely gone unnoticed by the public. The goal of the initiative is to make prescription drugs more affordable for Medicare and its beneficiaries by instructing the Department of Health and Human Services (HHS) to negotiate directly with drug manufacturers.
The process will begin with the announcement of the 10 drugs that will be subject to negotiation in the first year of the initiative. Administration officials plan to make this announcement early this week, possibly on Tuesday morning ahead of a White House event. This move follows reports of the planned announcement last week by Politico.
Price negotiation for prescription drugs has been long practiced by other economically advanced countries, with the U.S. now having the opportunity to adopt a similar approach, albeit limited to drugs used in Medicare. The first set of drugs to be included in the negotiation won’t be available in the program until 2026.
This initiative represents a significant change and is the result of years of activism and advocacy. It was made possible by the passage of the Inflation Reduction Act, which Democrats in Congress passed and President Biden signed one year ago.
Supporters argue that the price negotiation process could provide critical financial relief to those with high medical expenses, thereby reducing the overall burden on taxpayers and beneficiaries who pay premiums. On the other hand, critics express concerns that negotiation could hinder incentives for innovation by reducing financial rewards for drug companies, making it harder for them to invest in research and development of new treatments.
Critics include Republicans who opposed the Inflation Reduction Act and have discussed repealing its provisions if they gain more power in Washington. Additionally, the pharmaceutical industry has filed lawsuits challenging the constitutionality of the negotiation process, which are currently under review by the courts.
The first step in the initiative will be the naming of the initial 10 drugs subject to negotiation, as required by the Inflation Reduction Act by Friday, September 1. Analysts at Moody’s and at the Center for American Progress, as well as researchers who published in the Journal of Managed Care & Specialty Pharmacy, have projected the potential candidates for negotiation. These include drugs such as Eliquis, which prevents blood clots; Januvia, used to raise insulin levels in people with Type 2 diabetes; and Imbruvica, used to treat certain types of cancer.
Following the announcement, negotiations for these 10 drugs will take place over the course of the next year. The government will collect data, solicit public input, and eventually exchange price offers with manufacturers. If agreements cannot be reached, the government will make a final offer for what it considers a maximum fair price. Manufacturers will then have the option to accept the price, refuse it and face financial penalties, or withdraw from selling drugs to Medicare and other public programs.
Although the negotiated prices won’t take effect until January 2026, the Inflation Reduction Act includes other provisions related to drug pricing that will start phasing in next year. One such provision is a new limit on out-of-pocket drug expenses in Medicare, which will provide relief to individuals with multiple high-cost medications.
President Biden and his allies hope to raise awareness of these reforms to protect them from potential repeal efforts and to gain support ahead of the 2024 elections. Drug price negotiation has consistently received high poll numbers and has support from both conservative and liberal Democrats.
As the process unfolds, it is crucial to inform voters about the reforms that are taking place and the potential benefits they bring. The success of these initiatives could help improve President Biden’s approval ratings, which have remained negative since early 2022. By letting the public know that he has enacted and implemented reforms they support, President Biden may be able to turn these numbers around.
In conclusion, President Joe Biden’s launch of an initiative to lower prescription drug prices in Medicare is a significant step towards making healthcare more affordable for Americans. While critics express concerns about potential impacts on innovation, supporters argue that it could provide much-needed financial relief to those with high medical expenses. The initiative’s first year will focus on negotiating prices for 10 drugs, with additional drugs to be added in subsequent years. Although the savings won’t be realized until 2026, awareness of these reforms is crucial to protect them and gain public support. By prioritizing transparency and providing information to voters, the Biden administration aims to demonstrate its commitment to meaningful change in healthcare.
