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Biden’s 2022 budget re-ups prospect of Medicare drug pricing negotiations

June 1, 2021 Fraiser Kansteiner


Attempts to rein in prescription drug prices over the past few years haven’t amounted to much, but pricing is still on the agenda for President Joe Biden.

Biden “supports reforms that would bring down drug prices by letting Medicare negotiate payment for certain high-cost drugs,” the White House said in Biden’s budget plan for fiscal year 2022. The budget also endorses legislation that would put manufacturers on the hook for rebates when drug prices outpace inflation.

The proposed reforms could amount to more than “half a trillion in federal savings over the next 10 years,” the budget says. That could in turn help fund expansions and improvements to coverage, officials say. Still, details on how to make the reforms a reality were slim in the budget outline.

Biden campaigned on the issue of drug prices and he doubled down on the issue during his first State of the Union address in April. There, he sounded the call to “give Medicare the power to save hundreds of billions of dollars by negotiating lower drug prescription prices.” The move wouldn’t just help patients on Medicare but “lower prescription drug costs for everyone,” he said.

RELATED: Fierce Pharma Politics—Pfizer Vyndaqel copay lawsuit could bring drug pricing shockwaves

But the president left drug pricing provisions out of his American Families Plan, unveiled in late April, effectively leaving the issue to a divided Congress, where results are anything but certain.

Before Biden entered office, drug pricing experts were enthusiastic about the prospects of real changes during his first term. David Mitchell, founder of Patients for Affordable Drugs, told Fierce Pharma earlier this year the U.S. could be “looking at the best environment for passage of meaningful legislation to lower drug prices that we have seen in many, many years.”

But with a limited Democratic majority in the Senate, Medicare pricing negotiations may prove a particularly tough sell, Walid Gellad, M.D., director of the University of Pittsburgh’s Center for Pharmaceutical Policy and Prescribing, said in a separate interview.

RELATED: Pandemic fallout: Pharma execs should discard conservative playbook, take aggressive action, says report

Separately, a $6.5 billion piece of the budget has been proposed for the launch of a new National Institutes of Health arm, dubbed the Advanced Research Projects Agency for Health (ARPA-H). It’s no coincidence that the name conjures up thoughts of the Defense Advanced Research Projects Agency (DARPA), which helped lead to the creation of the internet, GPS and more. Now, the Biden administration is hoping ARPA-H can marshal the United States’ “scientific capacity” to bring that same level of innovation to the prevention, detection and treatment of diseases like cancer, diabetes and Alzheimer’s.



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