Minister of Health and Human Services Xavier Becerra speaks to the press after speaking on Jan.
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Minister of Health and Human Services Xavier Becerra unveiled the Biden government’s roadmap to cut prescription drug costs on Thursday.
The plan, summarized in a 29-page document, supports laws that allow the federal government to negotiate lower prices for the most expensive drugs each year and pass those savings on to private insurers. Current regulations prohibit HHS from negotiating drug prices on behalf of Medicare – the federal government’s health insurance policy for the elderly.
It would reduce regulatory barriers to the Food and Drug Administration’s approval of a new drug and encourage drug manufacturers to develop drugs that are already in the U.S. market, thereby ensuring competition and forcing other companies to lower prices, so the government.
“Life-saving prescription drugs shouldn’t cost anyone their savings. But too often, many low-income families cannot take their prescription drugs because of cost reasons, “Becerra said in a statement released with the plan. “By promoting negotiation, competition and innovation in the healthcare industry, we will ensure cost equity and protect access to care.”
The S&P Pharmaceuticals ETF has barely changed in morning trading.
Per capita spending on prescription drugs in the US far exceeds that of other high-income countries, rising to a total of $ 369 billion in 2019, according to US data.
Lowering drug costs is a long-standing goal of Democrats and some Republicans, including former President Donald Trump. In view of the Covid-19 pandemic, the proposals have a new urgency.
Last month, President Joe Biden called on lawmakers to pass laws aimed at lowering drug prices, including allowing Medicare to negotiate drug prices.
Pharmaceutical companies have argued that the price increases were modest and they have cited concerns about the country’s rebate system. These are the discounts that drug manufacturers give to middlemen like pharmacy service managers, often in exchange for cheaper insurance coverage for their drugs.
Pharmaceutical Research and Manufacturers of America trade group has criticized proposals that allow the federal government to negotiate drug prices.
PhRMA President and CEO Steve Ubl criticized the Biden administration’s proposal, calling it “a laundry list of old partisan ideas and no serious plan to address what patients pay out of pocket for prescription drugs”.
“What it leaves out is any attempt to fix a broken insurance system that discriminates against sick patients and does nothing to hold insurers and middlemen responsible for pocketing savings from our companies that should go to patients for their expenses to lower, “he added.
HHS said Thursday that branded drug prices in the US are rising faster than inflation, and a lack of competition is a key contributing factor to those high drug costs.
The new plan would support trial reimbursements for Medicare drugs based on the “clinical value” they provide to patients.
It would also ban “pay-for-delay” agreements, a tactic encouraging drug manufacturers to withhold commercialization of generic drugs for branded drugs.