Consider This from NPR - Biden's Push to Make Some of the Most Expensive Prescription Drugs Cheaper

Episode Date: August 29, 2023

On Tuesday, the Biden administration released a list of 10 medications that it's planning to negotiate prices for Medicare in an effort to bring down the costs of some of the most expensive drugs. It's part of a reform included in the Inflation Reduction Act. Many on the list are life-saving drugs that treat diabetes, cancer and other major health problems.|The new prices that the federal government will eventually negotiate for these prescription drugs won't actually go into effect until 2026, and that's only if it doesn't get tied up in court with drugmakers. Six pharmaceutical companies who have filed lawsuits against the administration are calling these provisions unconstitutional. Juana Summers speaks with NPR's pharmaceuticals correspondent Sydney Lupkin and Deepa Shivaram at the White House about the battle lines being drawn between the Biden Administration and pharmaceutical companies.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This message comes from Indiana University. Indiana University performs breakthrough research every year, making discoveries that improve human health, combat climate change, and move society forward. More at iu.edu forward. There's a battle brewing over the prices for the prescription drugs many seniors are taking. It pits President Biden and the White House against big drug companies. We're going to keep standing up to big pharma and we're not going to back down. On Tuesday, the Biden administration released a list of 10 medications that it's planning to negotiate prices for Medicare. Many of these are life-saving drugs that treat diabetes, cancer, and other major health problems.

Some names might be familiar to you from TV ads. Eloquence. Eloquence reduces. Imagine the possibilities with Stelara. Imbruvica is a prescription medicine. Xarelto significantly lowers the risk of stroke. The 10 drugs cost Medicare $50 billion last year, and consumers paid more than $3 billion out of pocket for the drugs. These are drugs that seniors rely on.

That is Minnesota Democratic Senator Amy Klobuchar. She fought for the bargaining powers that Medicare will now wield against these drug makers. These are the most profitable companies in the world. The profit margins of the big drug companies are almost three times the average profit margin of the other industries in this nation. So people shouldn't let these big drug companies scare them. Average prices for prescription drugs in the United States are much higher than in other parts of the world. The new prices that the federal government will eventually negotiate for these prescription drugs won't actually go into effect

until 2026, and that is if it doesn't get tied up in court with drug makers. Six pharmaceutical companies have filed lawsuits against the administration and are calling these provisions unconstitutional. There is absolutely nothing in the Constitution that prohibits Medicare from negotiating drug prices. That is Neera Tanden. She's domestic policy advisor to President Biden. We would argue that it is a basic component of capitalism that you negotiate the price of something. And what the pharmaceutical companies are arguing, essentially in their filings, is that they should have the ability to charge whatever price they want. That is wrong.

The pharmaceutical industry contends that these types of price negotiations will hurt innovation and will ultimately reduce patient access to new medications. Tandon disagrees. They are able to manage with lower drug costs in every other country in the world. Pharmaceutical companies today spend more on stock buybacks and advertising than they do on research. And so there is plenty of investment that they can make. Consider this. The Inflation Reduction Act gives the federal government power to negotiate the price of certain drugs for Medicare. The idea here is not just to make the 10 drugs on this list cost less for the people who need them. It's to use those savings to make Medicare more generous for all 60 million people in the program.

From NPR, I'm Juana Summers. It's Tuesday, August 29th. This message comes from WISE, the app for doing things in other currencies. Send, spend, or receive money internationally, and always get the real-time mid-market exchange rate with no hidden fees. Download the WISE app today today or visit wise.com.

T's and C's apply. This message comes from Indiana University. Indiana University is committed to moving the world forward, working to tackle some of society's biggest challenges. IU makes bold investments in the future of bioscience and cybersecurity, cultivates visionary work in the arts and humanities, and prepares students to become global citizens by teaching more languages than any other university in the country. Indiana University. Nine campuses, one purpose. Creating

tomorrow, today. More at iu.edu. This message comes from Pushkin. In a new episode of the Revisionist History Podcast, how a right-wing organization tried to take over the Parent Teacher Association in the 1960s. Listen wherever you get your podcasts. It's Consider This from NPR. Tuesday, the Biden administration released the list of 10 drugs that it's planning to negotiate prices for Medicare. The negotiation reform is part of the Inflation Reduction Act and could save the government nearly $100 billion a year. I spoke with NPR Pharmaceuticals correspondent Sidney Lepkin and at the White House, NPR's Deepa Shivaram. I started by asking Sidney about the drugs they're negotiating

and how much money we are really talking about here. So this is a list of 10 drugs that includes blood thinners, Eliquis and Xarelto, plus drugs that treat heart failure, diabetes, cancer, and arthritis. Senator Amy Klobuchar said that the administration was really going after blockbusters. But these drugs also had to meet a pretty detailed set of rules to be up for negotiation. For instance, they had to be on the market already for a number of years and have no competing generics or substitutes called biosimilars. So that ruled out some top selling drugs like Humira, which has been hugely popular and expensive for more than two decades. But a bunch of biosimilar copycats to Humira, which has been hugely popular and expensive for more than two decades. But a bunch of biosimilar

copycats to Humira entered the market just this year, so it wasn't eligible for price negotiations. The drugs that are on the list cost Medicare a total of $50 billion with a B last year, plus $3.4 billion in out-of-pocket costs for seniors. So that could all come down. And just to give you an idea of what that might mean for patients, the highest average annual out-of-pocket cost was above $5,000 for patients who need Imbruvica, a cancer drug. And lowering that would be a big help for those patients. Okay. And patients, they are, of course, also voters. So Deepa, to you now, what does that mean for President Biden politically?

Yeah. I mean, this is a very popular issue across the political spectrum, Juana. Polling shows that a majority of Democrats, Republicans, and independent voters all support Medicare being allowed to negotiate the cost of prescription drugs. But actually getting this process to this point has taken years. And other presidents, including former President Donald Trump, have tried to start this process, but they never succeeded. So experts I talked with say that this moment is a big win for Biden. He gets to say, I'm the one who got it done. And that's a message that Biden will take to voters. Talking about lower drug prices is going to be a major talking point for him as he hits the campaign trail and continues to try to spread his economic message. And keep in mind, the high cost of

drugs is also an issue that impacts older voters in particular, a group that in the last presidential election, Trump had more support from than Biden. And of course, we might be seeing a rematch of sorts between them in 2024. So this is an already popular issue, and it could help Biden gain support from voters he didn't win over last time. Okay, Deepa, I want to stick with the politics here for a second because President Biden has been trying to sell his economic message to the public, to voters for months, but it hasn't really been clicking with people. So will this announcement that prices on these 10 drugs could be coming down in the future, do you think it's going to resonate differently?

Well, that's definitely what the White House is hoping for. I was in the room for President Biden's remarks today, and he was talking to Democratic supporters about how they've been trying to lower the cost of prescription drugs for a long time. But it was interesting because he really spoke about it as part of his larger economic message. This announcement about drug prices to me felt less like a singular plan and more so Biden saying, you know, this is one piece of the puzzle in lowering costs. The problem for Biden, though, as you point out, is that polling shows that voters haven't really been giving him credit for his economic agenda so far, even when his plans are politically popular

like this one. And the White House has been saying it'll take time for Biden's plans to work and actually lower costs. And this announcement today falls into that boat, too, because people won't see an immediate reduction in the cost of these drugs. The new prices aren't scheduled to take effect until 2026, which is after the presidential election. But I talked to one strategist who says that this is still a political win for Biden because voters will know that a specific cost of something they're paying for will be coming down. Here's Jeremy Sharp. He worked on this issue of prescription drug prices in the Obama administration and on Capitol Hill. And so I think they will start to

feel this even before the negotiated price goes into effect. But I think they're also smart enough to see that a negotiated price on a drug that they are taking right now will be meaningful for them in the next year or two. And Sharpe says that releasing this list of these 10 drugs makes it more real, more tangible for Medicare beneficiaries and voters. And he thinks they'll give Biden credit for this, even though lower costs aren't really coming immediately. So, Sydney, how is the drug industry responding to all of this news? Yeah, they don't like it and they're pushing back. Basically, they're saying if they can't charge what they want, they won't be able to bring as many new medicines to market. But the Congressional Budget Office estimated that the Inflation Reduction Act as a whole would only have a modest impact on drug development. So out of the 1,300

new drugs expected over the next three decades, It says 13 fewer of them would come to market because of this law. Still, the industry is suing. Here's Professor Robin Feldman at University of California Law. The wailing and gnashing of teeth of the eight lawsuits already filed suggest that the program will have some impact on the dollar flow. Drug makers, the trade group Pharma, and the Chamber of Commerce have all sued the government over this law. Feldman says the cases are probably headed to the Supreme Court. All right, Sydney, in the 30 seconds or so we've got left, sum up what comes next here. A lot has to happen before Medicare beneficiaries see lower prices on these drugs.

The companies making them have until know, have until October to agree to negotiate. The back and forth will probably go until next August. So the negotiated prices would be announced about a year from now when election season is in full swing and they take effect January 1st, 2026. All right. We'll hear more from you soon. NPR's Deepa Shivaram and Sydney Lubkin. Thank you both. Thank you. Thank you. It's Consider This from NPR. I'm Juana Summers.