The NPR Politics Podcast - After 30 Years, Here's Biden's Plan To Lower Drug Costs: Negotiate

Episode Date: August 30, 2023

The government announced the first ten drugs that are the subject of price negotiations between the U.S. government and private companies. For decades, the government has been prohibited from negotiating the price it pays through Medicare for medication — until the rule was relaxed under the Affordable Care Act.This episode: White House correspondent Tamara Keith, White House reporter Deepa Shivaram, and Pharmaceuticals correspondent Sydney Lupkin.The podcast is produced by Elena Moore and Casey Morell. Our editor is Eric McDaniel. Our executive producer is Muthoni Muturi. Unlock access to this and other bonus content by supporting The NPR Politics Podcast+. Sign up via Apple Podcasts or at plus.npr.org. Connect:Email the show at [e-mail] the NPR Politics Podcast Facebook Group.Subscribe to the NPR Politics Newsletter.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hi, this is Louise in Manchester, England. I'm probably the least musical person in Britain, but now I'm retired, I'm trying to learn the ukulele. It's excruciating, but strangely joyful. This podcast was recorded at... 1.09pm on Wednesday, August 30th. Things may have changed by the time you hear this, but I'll still be strumming doggedly away across the pond.

Best wishes to you all, and here's the show. I would like to hear her ukulele playing. As you say, I wonder what she's learning with. I feel like every music kid, every band kid can relate to that. It's excruciating, but we love it. Yeah, you know, I will say last night for the first time in maybe 20 years, I picked up my bass guitar and I practiced for like an hour. So I feel a kindred spirit with her. I love that.

Hey there, it's the NPR Politics Podcast. I'm Tamara Keith. I cover the White House. I'm Deepa Shivaram. I also cover the White House. And NPR's pharmaceuticals correspondent, Sydney Lepkin, is here. Hello. Hi. So in the current polarized political landscape, there are not a lot of policy ideas that are almost universally popular, but allowing the federal government to negotiate prescription drug prices

is one of them. And on that front, President Biden made a big announcement yesterday. We're going to see this through. We're going to keep standing up to Big Pharma and we're not going to back down. So Sydney, tell us about the announcement. Sure. So the Biden administration announced the first 10 drugs that Medicare will finally be able to actually negotiate their prices. And these are drugs that, not surprisingly, a lot of older Americans who are on Medicare take. So they're like blood thinners like Eliquis and Xarelto. They include arthritis drugs. They include heart failure drugs. They include cancer drugs. And they make up a big chunk of Medicare Part D spending, somewhere in the neighborhood of $50 billion. And if you figure the program spends north of $200 billion,

that's still a huge, huge chunk of how much Medicare Part D is spending on just 10 drugs out of the thousands that it covers. And to be clear, Medicare Part D is the part of Medicare that covers medications. That covers medications at the pharmacy counter. Deepa, you were at the White House yesterday. There was a lot of fanfare, perhaps more fanfare than this policy got when it was originally passed as part of that big amorphous law known as the Inflation Reduction Act. I know. When we heard Inflation Reduction Act, it meant a lot of things. But when that act was signed, you know, it was kind of advertised as a climate bill, a big climate bill, a big jobs bill. We weren't all looking at the Medicare aspect of this specifically. One part of it, though,

that we did hear get a lot of applause, Biden has been talking about it, Vice President Harris has been talking about it, is capping the cost of insulin. That was something tangible. That was something that the administration kept talking to. And so this announcement yesterday kind of ties into part of that. And they did have a big announcement. It was in the East Room. You had a number of Democratic supporters in there who were applauding at several points. This is something that the White House is really trying to showcase and advertise and make a big deal out of, to Sydney's point, because this is something tangible that a lot of people will start to feel their costs going down as the cost of these drugs, which are very expensive, go down. One of the reasons that this

is so huge is that Medicare Part D was created in 2003 by a Republican-led Congress, and they barred the program from negotiating drug prices for Medicare Part D. And that serves like 50 million seniors. So that's a group that also takes a lot of drugs. So we're talking about more than $200 billion worth of drugs. The industry would say that it gets a lot less for drugs than that number, thanks to things like rebates for drug makers that the drug makers pay back to the government. But those are usually confidential, so kind of tricky to fact check. But for decades, it sort of stayed like this. Medicare can't negotiate drug prices. And even though, you know, others have tried to fix that, it just hasn't happened.

Right. Presidents from both parties have been talking about trying to do something like this for literally decades, from for President Bill Clinton to Obama to Trump. So how did all of those presidents fail to get it done? But now Biden is in the East Room celebrating. I mean, the short answer is lobbying, right? The pharmaceutical industry is and has been among the biggest spenders on lobbying on Capitol Hill year after year after year. And it's not just lobbying, it's campaign contributions. And it's also, and this is prior reporting that I've done in this area, patient advocacy groups. Even those groups that seem like they're representing only patients for a certain disease, they are.

Those patients definitely have those disease and whatnot. But like who's funding the plane tickets to get all those people to Capitol Hill and what are they not saying? And a lot of the time they're not saying anything about drug prices. All right. We are going to take a quick break. And when we get back, there's actually a lot that could go wrong before any senior citizens see lower prescription drug prices. And we're back. And Sydney, as you told us, the government has released this list of 10 medications. But what comes next? When does

my dad go to the pharmacy and actually see a difference in what he's paying? So, I mean, obviously that depends on what drugs, whether he has one of these 10 drugs, but unfortunately it's not going to be next week. A lot has to happen before lower prices are actually a reality as a result of this. So the companies making them have until October to formally agree to participate in negotiations, submit data that will be used to arrive at that negotiated price. And then the administration will tell the companies those new prices that it's proposing on February 1st of next year. Then they're probably going to go back and forth for a little while. And then about this time next year, so in August, the negotiated prices would be announced

and then the election season will be in full swing. But then they won't take effect until January 1st, 2026. Deepa, as Sydney said, people, when they go to vote, will know about the new prices, but they won't actually feel them yet. It won't have taken effect. It won't take effect until well after the election. Yeah, I mean, definitely. We always know that older voters tend to turn out and show up reliably for their party, whichever way they go. And to your point earlier, Tam, this is a very politically popular thing to do, not just for Democrats, not just for Republicans. You see that across the board with everyone, including independents. And so for Biden here, this is a way to reach all of those voters and say, hey, look what I'm doing for you. And also, if you think about it, in the last presidential election, when Biden was facing off against President Donald Trump, Trump did better with older voters in that election.

And so this is also maybe a chance if we see another matchup of Biden and Trump in 2024 for Biden to kind of slice into that a little bit and gain some support from older voters. So this is definitely something you're going to see Biden talk about again and again on the campaign trail. This fits into his larger economic message. We know he's been talking about Bidenomics for a while now, and he's trying to sell that all over the country, talking about the Inflation Reduction Act. We also know, though, that that message isn't really sticking with a lot of Americans. People still think the economy is not that great. They still think unemployment is high. They think costs are really high, even if we know that inflation has gone down. So this is a moment here for Biden to try to say, hey, here's something tangible. Here's something that

even in this moment, if you might not see costs go down immediately, it's coming. And they're hoping that that kind of a message, you know, will stick with the public and with voters. Well, and congressional Republicans and also the presidential candidates, some of them at least, are talking a lot about wanting to repeal the Inflation Reduction Act, which, you know, among other things, also hires a bunch of IRS agents and puts money into solar panels and incentivizes electric cars and all of these things that Republicans don't like. Well, the White House and the Biden campaign want to draw attention to the parts of this legislation, this big legislation that people do like or could be convinced to like and to say, hey, wait, these people want to throw out stuff that's helping you. Why would you support that? And if you talk to experts, if you talk to people

who are working at these organizations that advocate for lower prescription drugs, they will say across the board that everyone running for office, not just Joe Biden, not just Democrats, anyone running for office will have to answer that question of do you support this move of being able to negotiate these drug prices? And that's something that you support this move of being able to negotiate these drug prices? And that's something that you'll hear Biden talk about a lot. Sydney, we talked before about all the lobbying that was used to try to prevent a law like this from ever being passed. So what are the drug companies saying and doing now? The industry hates this. And there are eight lawsuits so far. Most of them are from drug makers,

but the pharmaceutical industry lobbying group and the U.S. Chamber of Commerce have also sued the government to basically stop these provisions of the Inflation Reduction Act from coming to pass. They've made arguments around how this law violates things like free speech and various constitutional amendments. Ultimately, I'm told the lawsuits are most likely headed to the Supreme Court, and that could happen before these negotiated drug prices are scheduled to take effect in 2026. So it could totally slow the whole process down or halt it altogether. And Deepa, this reminds me of something else.

The president's pledge to erase student loan debt. And there wasn't a law passed. So that is different. Right. But his executive actions got stuck in court and and it hasn't happened. Yep. And could this be another one of those things where it's like, well, I tried. Right. And that's something we've talked about a lot with student debt relief, with some of Biden's other, you know, kind of proposals and actions here where he over promises. And is this one of those things where maybe people see this as under delivering if it doesn't come to pass? That's something that we're going to have to wait and see to see what happens. But I will say I talked to a number of people who kind of looked at the situation and said, you know, politically, this is still a good move for President Biden. And people who might not see their costs come

down immediately still look at this list and they can see on a list, hey, I take that drug. I know that cost is coming down. So there's some tangible aspects here that maybe are different compared to something like student debt relief, because as we all know, that is still standing. Sydney, bottom line here, if this isn't stopped by the courts, what could this eventually mean for people on Medicare and even younger Americans who need these drugs? So basically, of course, it's especially helpful if you're a patient who has a huge out-of-pocket expense for one of these drugs. Like Imbruvica, which is a blood cancer drug, that average out-of-pocket expense for the year for you is north of $5,000 a year. So seeing

that go down could be huge for you. If you are on Medicare and not on one of these drugs, this could have a positive impact on your monthly premium because premiums are kind of the way that everybody pays for everything, right? Like even if you're not on the drug, you're contributing to that premium. And then if you're not on Medicare at all and you're thinking, this doesn't affect me at all, that's also not really true. You're a taxpayer. Taxpayers pay for Medicare. So this also could have an impact on you as well. So there are ways that even indirectly, this kind of touches everybody. All right, let's leave it there for now. Sydney Lepkin, thank you so much for coming on the pod.

Thanks for having me. I'm Tamara Keith. I cover the White House. I'm Deepa Shivram, and I also cover the White House. And thank you for listening to the NPR Politics Podcast.