President Joe Biden wants to double the number of drugs that Medicare can negotiate prices for and allow the government to begin those talks more quickly, according to a 2024 budget proposal released Thursday.
Biden’s plan would build on the Inflation Reduction Act passed last year that gave Medicare the power to broker prices for some top-selling drugs. The law enables Medicare to negotiate prices on 10 drugs in 2026 and up to 140 by 2033. Biden’s budget would double those totals, with 20 eligible for negotiation initially and 300 by 2033, according to Bloomberg Law, citing data it received from the Centers for Medicare and Medicaid Services.
A CMS spokesperson declined to comment.
The budget also calls for making drugs eligible for price negotiation much sooner than the IRA allows. The White House wants the ability to begin those talks five years after medicines reach the market, according to Bloomberg. Small molecule drugs are currently exempt for nine years, while biologic, or “large molecule” drugs, have a longer exclusivity period of 13 years.
“Is there a reason why Americans should be paying two or three times the price for prescription medication compared to someone in France or in Australia or in Canada or Mexico or anywhere else? We should be able to get the best price for all these prescription medications,” U.S. Department of Health and Human Services Secretary Xavier Becerra said in a press conference Thursday.
The White House’s annual budget proposal is a “wish list” document typically meant to stake out positions for the coming legislative session and future elections. “[T]he bill in this or any similar form is likely to be a non-starter given the likelihood of significant opposition from Republicans,” wrote RBC Capital Markets analyst Brian Abrahams.
Still, Abrahams expressed concern that “drug pricing continues to be used as a negotiating lever" and that the debate “may not be off the table” as many had expected following the IRA’s passage last year.
Biden’s plan counters Republican proposals — since withdrawn — to cut Medicare spending on healthcare services to avert a depletion of the Hospital Insurance Trust Fund, an outcome the government has projected could happen in 2028.
The budget is meant to use drug cost savings and tax increases to extend Medicare’s solvency by 25 years. Biden questioned Republicans’ support for the program in his annual address to Congress last month, but GOP leadership has said Medicare spending won’t be touched in the coming debate over the debt ceiling and federal deficit.
“Rather than seek bipartisan solutions that strengthen Medicare and preserve benefits that seniors enjoy today, President Biden wants to double down on government price setting policies from the IRA,” Energy and Commerce Committee Chair Cathy McMorris Rodgers, R-Wash., said in a statement Thursday.
The proposal would also expand rebates drugmakers pay to commercial insurance plans. The rebates, which start this year, are currently limited to Medicare drug prices that exceed the rate of inflation. The additional rebates and proposed drug price negotiations would save over $200 billion in drug costs through 2033, the White House said.
The budget would also increase funding for the Food and Drug Administration to $7.2 billion — half a billion dollars more than last year — and includes an $11 billion initiative meant to eliminate hepatitis C in the U.S.
Jonathan Gardner contributed to this report.