The Biden administration released a prescription drug plan on Thursday that backs congressional Democrats’ push to let Medicare negotiate drug prices.
President Joe Biden’s plan is short on the specifics about how the federal government would negotiate prices. Legislation advanced by House Democrats would empower the Department of Health and Human Services to negotiate prices for the 125 drugs that account for the highest spending under Medicare. The price for each drug would not be allowed to exceed 120% of the average price paid by countries such as Canada, Germany, and the United Kingdom.
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The Biden plan also promotes administrative actions that could be enabled by congressional legislation. Those actions include new funding for drug research and allowing the federal government to test linking reimbursement for drugs based on the clinical value they provide to patients.
It also would limit drugmakers’ ability to hike prices on existing drugs, cap out-of-pocket costs in Medicare Part D, and eliminate regulatory barriers to producing generic drugs and biosimilars.
“The Biden-Harris Administration remains committed to making health care more affordable for American families, and this Plan outlines one key way we will do that,” HHS Secretary Xavier Becerra said in a statement.
But opposition is already forming. Pharmaceutical companies and Republicans are opposed to letting Medicare negotiate drug prices.
“It’s really a smokescreen for implementing new government price controls,” David Ricks, the chairman and chief executive of Eli Lilly, told the Wall Street Journal. “We cannot and will not support policies that hurt patient access.”
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Letting the government negotiate drug prices has also drawn opposition from 10 House Democrats, who signed a letter to House Speaker Nancy Pelosi in May warning that in other nations that fix drug prices, “effective cancer treatments may not be realized by the patient community for an extended period of time. There is a balance between innovation and affordability.”
