Biden says Medicare should negotiate prices for at least 50 drugs each year, up from a target of 20

President Joe Biden on Wednesday said the federal Medicare program should negotiate prices for at least 50 prescription drugs each year, up from the current target of 20 medicines. 

That’s one of several new health-care policy proposals that Biden will outline during his State of the Union address on Thursday, according to a fact sheet released by the White House Wednesday. Many of those efforts aim to expand parts of the Inflation Reduction Act that are geared toward making medicines more affordable for seniors and could take a bite out of the pharmaceutical industry’s profits.

Biden has made lowering U.S. drug prices a key pillar of his health-care agenda and reelection platform for 2024. But the fate of his new proposals will sit in the hands of a divided Congress, making it highly uncertain if they will pass into law. 

Among the other policy proposals are measures to cap Medicare copayments at $2 for common generic drugs and to extend the $2,000 cap on out-of-pocket drug costs beyond Medicare to all private plans.

Biden also wants to expand another policy under the Inflation Reduction Act that requires drugmakers to pay rebates to Medicare when their drug prices rise faster than inflation. 

But his call to raise the number of drugs eligible for negotiations with Medicare will likely face the fiercest blowback from the pharmaceutical industry. The Biden administration is already in a bitter legal fight with several drugmakers over the talks. The industry is aiming to escalate the issue to the Supreme Court. 

The administration kicked off the negotiation process last fall when it unveiled the first 10 drugs that are subject to price talks with Medicare. 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 that will go into effect in 2027 and an additional 15 beyond that to take effect in 2028. Under the current structure, the number rises to 20 negotiated medications a year starting in 2029.

Biden wants to raise that number to 50 to account for “major drugs that seniors rely on,” according to the fact sheet. Those drugs include medications for heart disease, cancer and diabetes. 

The change will “not only save taxpayers billions of dollars, but more importantly, it will save lives and give seniors critical breathing room that they need,” said Neera Tanden, who serves as the president’s domestic policy advisor, during a call with reporters on Wednesday.

The president’s budget cuts federal spending by $200 billion, the White House fact sheet noted. That could increase the number of drugs that Medicare could select for negotiation and bring more medicines to the negotiation process sooner.

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