The administration endorses a proposal for the government to negotiate on prices for all U.S. purchasers, not just Medicare.
The Biden administration on Thursday endorsed an aggressive proposal to limit prices for prescription drugs, a signal to congressional Democrats as they consider options for their large legislative package. The proposal was published as a 29-page white paper from the Department of Health and Human Services. It included a range of recommendations to foster more competition among drugmakers and improve the affordability of drugs for patients enrolled in Medicare. But its primary recommendation was a big one: that the department should negotiate with drug companies on their product prices, and that those prices should apply to all drug purchasers in the country, not just Medicare, the federal program primarily for people 65 and older. Democratic leaders in Congress have signaled that they hope to regulate prices in some way as part of the $3.5 trillion package now being considered, but have released few policy details as they wrestle with their approach. The White House’s endorsement does not assure that Congress will try to take such a large bite out of pharmaceutical prices — and profits. But it shows that the administration is open to bold approaches. Drug price regulation represents a key element of the Democrats’ legislative package, because it is one of the few proposed policies that could reduce, rather than increase, federal spending. Any policy that substantially reduces drug prices has the potential to save the government a lot of money. The federal government pays a large share of drugs for patients with Medicare, and subsidizes insurance plans that purchase drugs for other Americans.
