Hundreds of thousands of older Americans could pay less for some of their outpatient drug treatments beginning early next year, the Biden administration announced Thursday. The White House unveiled a list of 48 drugs — some of them injectables used to treat cancer — whose prices increased faster than the rate of inflation this year. Under a new law, drugmakers will have to pay rebates to the federal government because of those price increases. The money will be used to lower the price Medicare enrollees pay on the drugs early next year.
Quick Read
- Price Reductions for Outpatient Drugs: The White House released a list of 48 drugs, including injectables used for cancer treatment, whose prices will be reduced. This is due to their prices increasing faster than the inflation rate.
- Implementation of Inflation Reduction Act: This move is a direct result of the Inflation Reduction Act, which mandates drugmakers to pay rebates to the federal government for price hikes that surpass inflation.
- Savings for Medicare Enrollees: The rebates from pharmaceutical companies will lead to savings for Medicare enrollees, ranging from $1 to as much as $2,700 per drug. Approximately 750,000 older Americans are expected to benefit from this every year.
- First Time Application of Penalties: This marks the first instance of drugmakers paying penalties for outpatient drug treatments under the new law.
- Biden Administration’s Broader Effort: This action is part of a broader effort by the Biden administration to pressure pharmaceutical companies to reduce drug prices, including a recent proposal to revoke patents for some high-cost drugs.
- Report on Drug Price Negotiations: The U.S. Health and Human Services agency released a report guiding the first-ever negotiation process with drugmakers over the prices of 10 costly Medicare drugs. The new prices will be negotiated next year.
- Political Implications: As the 2024 presidential campaign approaches, the Biden administration is expected to focus heavily on its efforts to lower drug prices, with pharmaceutical companies likely to be a key target in the campaign narrative.
- Upcoming Speech by President Biden: President Biden is expected to discuss this issue further in an upcoming speech at the National Institutes of Health Clinical Center in Washington, D.C.
- Impact on Pharmaceutical Industry: The announcement and these measures indicate a shift in policy that places significant pressure on the pharmaceutical industry, particularly regarding their pricing strategies.
- Healthcare Cost Reduction Focus: The administration’s actions underscore a focus on reducing healthcare costs for Americans, particularly older citizens reliant on Medicare.
The Associated Press has the story:
Older Americans to pay less for some drugs as drugmakers penalized for big price jumps
Newslooks- WASHINGTON (AP)
Hundreds of thousands of older Americans could pay less for some of their outpatient drug treatments beginning early next year, the Biden administration announced Thursday.
The White House unveiled a list of 48 drugs — some of them injectables used to treat cancer — whose prices increased faster than the rate of inflation this year. Under a new law, drugmakers will have to pay rebates to the federal government because of those price increases. The money will be used to lower the price Medicare enrollees pay on the drugs early next year.
“For years, there’s been no check on how high or how fast big pharma can raise drug prices,” President Joe Biden said Thursday, speaking in a lab at the National Institutes of Health in Bethesda, Maryland. “Let’s call this for what it is – it simply is a rip off. They’re ripping off Medicare. They’re ripping off the American people. We’re now fighting back.”
This is the first time drugmakers will have to pay the penalties for outpatient drug treatments under the Inflation Reduction Act, passed by Congress last year. The rebates will translate into a wide range of savings — from as little as $1 to as much as $2,700 — on the drugs that the White House estimates are used every year by 750,000 older Americans.
The rebates are “an important tool to discourage excessive price increases and protect people with Medicare,” Chiquita Brooks-LaSure, the administrator for the Centers for Medicare and Medicaid, said Thursday in a statement.
As it readies for a 2024 reelection campaign, the Biden administration has rolled out a number of efforts to push pharmaceutical companies to lower drug prices. Last week, the White House announced it was considering an aggressive, unprecedented new tactic: pulling the patents of some drugs priced out of reach for most Americans.
“On no. We’ve upset Big Pharma again,” the White House posted on the social media platform X, formerly Twitter, last week, just hours after the announcement.
The U.S. Health and Human Services agency also released a report on Thursday that will help guide its first-ever negotiation process with drugmakers over the price of 10 of Medicare’s costliest drugs. The new prices for those drugs will be negotiated by HHS next year.
With the negotiations playing out during the middle of next year’s presidential campaign, drug companies are expected to be a frequent punching bag for Biden’s campaign. The president plans to make his efforts to lower drug prices a central theme of his reelection pitch to Americans. He is expected to speak more on the issue later today at the National Institutes of Health Clinical Center in Washington, D.C.
