President Joe Biden stepped up his battle over drug costs on Thursday, calling on Congress to pass legislation that would let Medicare negotiate directly with pharmaceutical manufacturers and penalize drugmakers that increase prices faster than inflation.
Biden’s remarks from the White House were less a set of new policy ideas than a reminder that he is eager to make headway on an issue of keen concern to voters—one he describes as critical to helping Americans recover economically from the pandemic.
“Alzheimer’s diabetes, cancer—they don’t care if you’re Democrat or Republican,” Biden said in the East Room. “This is about whether or not you and your loved ones can afford prescription drugs.”
That formulation overlooks the considerable difference between the parties, and among powerful interest groups, over how big a role the government should play in taming drug costs. And Biden’s initiative comes at a delicate time, as drugmakers have earned some of their best headlines in years for the lightning-fast development of coronavirus vaccines.
Citing those inoculations, Biden said, “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.” He told the story of a woman he’d met whose insulin cost $32 a vial in 2001, saying now that same vial costs $280.
In a reflection of the turbulent political climate on health matters, Biden began his comments by excoriating those, including Republican governors, who are politicizing covid-19 mask requirements, citing a recent incident in Tennessee where doctors and nurses were threatened after testifying before a school board.
Many Democrats, including Biden, have long supported the idea of allowing Medicare to negotiate the price of medicines directly with pharmaceutical companies—something forbidden under the 2003 law that created the program’s drug benefits.
Giving the government such negotiating power was part of Biden’s campaign health-care plan, and it is woven into what the White House calls the American Families Plan that the president proposed in April. He has urged Congress to adopt such an arrangement by the end of the year.
While negotiating with drugmakers was the centerpiece, Biden listed a series of other ideas for lowering drug prices.
He touted a proposal for penalizing drugmakers that raise prices more rapidly than the rate of inflation. He said Medicare should cap the amount beneficiaries have to pay out-of-pocket for drugs each year. He said he favors accelerating the development of generic drugs, as the Food and Drug Administration is striving to do.
And he reiterated his support for allowing the importation of drugs from Canada, where they tend to be sold at lower prices. This idea is favored by many Democrats and was embraced by President Donald Trump over the objections of the pharmaceutical industry.
Importing drugs was also part of an executive order Biden issued last month to spur economic competition. Among other things, the order directed his administration to work with states to devise plans to import medicines safely from Canada.
Biden’s remarks came as he began an intensified effort to promote the American Families Plan, a $3.5 trillion spending package that focuses on areas from health care to education. His comments were intended in part to counter Republican charges that the plan is recklessly expensive, portraying it instead as a collection of vital measures that will help ordinary Americans.
“All of us, whatever our background or our age and where we live, can agree that prescription drug prices are outrageously expensive in America,” Biden said, adding, “Right now, right here in America, we pay the highest prescription drug costs of any developed nation in the world . . . about two to three times what other countries pay.”
Taking on drug prices allows Biden to emphasize an issue that affects millions of people, and one where many Americans favor government action. And it dovetails with the goal of Biden and other Democrats to expand health coverage.
Americans spend an average of $1,200 a year on prescription drugs, the highest of any industrialized nation, in large part because of high drug costs, according to recent estimates.
Concern over the future cost of medicines has been amplified as pharmaceutical research has led to treatment breakthroughs, some of them exceedingly expensive. American consumers and the government face growing concerns about whether those and other drugs will be within reach for the people who need them.
The Food and Drug Administration recently prompted a backlash by approving an Alzheimer’s drug called Aduhelm, which is not only expensive—$56,000 a year per patient—but which many doctors believe has not been shown to work.
On Thursday, Biden ticked off price increases for insulin to treat diabetes and common medicines for multiple sclerosis and rheumatoid arthritis.
A report by Reuters showed that drugmakers raised prices on more than 500 drugs in 2021, in part to offset declining revenue during the coronavirus pandemic, as wary Americans visited doctors’ offices less and were prescribed fewer pills.
The price hikes included more than 300 manufactured by Pfizer, the manufacturer widely praised for producing an early coronavirus vaccine. “While the pharmaceutical companies have done enormous work by developing lifesaving covid-19 vaccines alongside the United States’ best scientists, crippling drug prices are unacceptable,” Biden said.
The government is paying for Americans to get the coronavirus vaccines, so their cost is not an issue for the public.
The pandemic has pushed health costs and disparities into the center of the national conversation. Infections and deaths from covid-19, the illness caused by the virus, have been disproportionately common among people of color and the poor.
Public health leaders warn that people unable to afford a doctor, or take off work for a fever or a cough, could contribute to the spread of a virus that has killed more than 617,000 Americans.
The pharmaceutical industry has long opposed a greater federal role in drug prices, and PhRMA, the industry’s main trade group, is currently sponsoring an ad campaign criticizing direct negotiation of Medicare drug prices.
In response to Biden’s effort Thursday to focus attention on the issue, PhRMA issued a “myth vs. fact” statement, contending that government-negotiated Medicare drug prices would be accompanied by “a harsh reality: reduced access to prescription medicines and choices for patients.”
PhRMA CEO Stephen Ubl argued that Biden’s proposals, by wringing money out of Medicare, would only hurt its beneficiaries and vulnerable patients.
“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,” Ubl said in a statement. “This is a misguided approach.”
Biden had harsh words for the industry. “Too may pharmaceutical companies don’t use the profit nearly enough to innovate or on research,” he said. “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.”
He added, “Look, folks, they should be able to make a significant profit. But why should we be paying two or three times what every other country in the world is paying for similar drugs?”
While he did not issue new proposals Thursday, Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, a nonpartisan policy and research organization, said Biden was seeking to raise his profile in the debate in a new way.
“President Biden is putting his political weight behind the effort to lower drug prices,” Levitt said. “There was a sense that the president was to some extent sitting on the sidelines in the debate over drug prices, but that is clearly not the case anymore.”
And he was aligning with the view of most Americans.
Nationwide, recent surveys suggest that lowering drug prices remains a significant priority with the American public. In a Kaiser Family Foundation poll from May, two-thirds of the respondents said that it should be a top congressional priority to adopt legislation that allows the federal government and private insurers to negotiate lower prices on prescription drugs.
That was the highest ranking among eight health-care proposals included in the poll. And 59 percent said states should have the same authority, the poll found.
Biden stressed the public support for his prescription drug proposal, as well as other aspects of his infrastructure plan, which he said would help American families rebound faster from an economy damaged by the coronavirus pandemic.
The president has spent this week bolstering his spending agenda, which includes a bill to improve traditional infrastructure, like roads and bridges, as well as a more ambitious—and expensive—effort aimed at what the White House calls “human infrastructure,” or the American Families Plan.
The Senate passed the bipartisan physical infrastructure plan this week, and now the measure moves to the House, which is narrowly controlled by Democrats. Lawmakers have only just begun tackling the American Families Plan, which would include the drug pricing proposals.
Any plan to reduce prescription drug prices could run into hurdles in Congress. Thirteen of the 20 largest drug companies, and hundreds of smaller biotechnology companies, are headquartered in New Jersey, representing billions in research and development spending. Some Garden State lawmakers have resisted efforts to fund other progressive priorities by cracking down on pharmaceutical company revenue. And they are only some of the powerful supporters the drug industry has in Congress.
But Biden argued that the country’s overriding need is to bring down costs for working Americans.
“These challenges were with us long before the pandemic took off,” he said. “But as we recover from this crisis, now is the moment to put in place a long term plan to build back America better.”