President Biden doubled down on efforts to rein in prescription drug prices during his State of the Union address on Tuesday and warned Republicans that he will fight any attempts to roll back his initiatives.
Biden called on lawmakers to cap insulin costs at $35 a month for all people with diabetes, a move that would expand a provision of last year’s Inflation Reduction Act that limits the price for people on Medicare. It costs about $10 to produce a vial of insulin, and drugmakers are charging people hundreds of dollars a month for the drug while “making record profits,” Biden said.
The president also criticized Republicans who are threatening to repeal elements of the inflation-fighting act. In addition to the insulin cap, the law gave Medicare the power to negotiate prices for some medicines, capped out-of-pocket drug costs for Medicare patients at $2,000 a year and required drugmakers to pay rebates to Medicare if their prices rise faster than inflation.
“We pay more for prescription drugs than any nation in the world,” Biden said during the joint meeting of Congress Tuesday night. “Make no mistake — if you try anything to raise the cost of prescription drugs, I will veto it.”
After the speech, the drug industry’s main trade group said its members are eager to work with Biden on making medications affordable and his “cancer moonshot,” which aims to cut cancer death rates in half over the next 25 years. But the group, the Pharmaceutical Research and Manufacturers of America, warned that price controls in last year’s inflation act are having adverse effects on innovation.
“The government price setting provisions in the law are forcing companies to make difficult choices, including shifting focus away from certain types of medicines and discouraging the research that takes place after medicines are first approved,” the group said. The actions threaten “the very research that remains critical to improving outcomes for cancer and other diseases.”
Congressional Democrats passed the IRA in August over the objections of the pharmaceutical industry and without winning a single Republican vote. Biden noted that overturning the law isn’t the “official party position” for Republicans, though some have made efforts to undo parts of it. Three GOP senators introduced a bill in October to repeal drug pricing provisions, for example.
Elements of the legislation — including the insulin cap — took effect Jan. 1. Others will be phased in over the coming years. On Sept. 1, the U.S. Department of Health and Human Services plans to release a list of the first 10 drugs slated for price negotiations in 2026.
As part of the law, medications are protected from price negotiations for a period of time after they first reach the market – nine years for small molecule medicines and 13 years for biologics. Some pharmaceutical executives have warned that the difference will shift investment away from small molecule drugs.
Novartis CEO Vas Narasimhan recently said that correcting the nine vs. 13 “distortion” is a top priority for the industry.