President Biden on Thursday demanded Congress take action to lower prescription drug prices, accusing drugmakers of pinching Americans with increasing drug prices.
The president called for legislation to allow Medicare to negotiate drug prices, which he said would reduce costs for millions of Americans.
“These prices have put the squeeze on too many families and stripped them of their dignity,” Mr. Biden said at the White House. “They’ve forced people into terrible choices between maintaining their health, paying the rent or the mortgage, or putting food on the table. I mean literally.”
Medicare is barred under federal law from negotiating drug prices, but can work out deals on other types of health care. The president’s comments came as Republicans in Congress are blaming him for inflation that’s reached its highest point in more than a decade.
Mr. Biden said Medicare should be able to negotiate prices for a subset of expensive drugs that don’t face any competition in the market. He said Medicare should be provided a framework for what constitutes a reasonable price for each drug, and incentives would be put in place to make sure drug companies agree to the price.
If a drug company raises a price faster than inflation, they would pay a penalty, Mr. Biden said.
He also called out drug companies, saying they are pricing drugs at the highest possible market price instead of trying to make their medicines more widely available to the public.
“When Americans overpay for prescription drugs, too many pharmaceutical companies don’t use the profit nearly enough to innovate or research,” he said. “Too many companies use it to buy back their own stock, inflate their worth, drive up CEO salaries and compensation and find ways to box out the competition.”
The president also called for capping price increases at the rate of inflation, and limiting seniors’ out-of-pocket expenses to roughly $250 per month.
“That would be a game-changer,” Mr. Biden said of capping seniors’ expenses.
Mr. Biden further proposed spending $6.5 billion to create an agency within the National Institutes of Health to conduct research into detecting and curing diseases like Alzheimer’s, diabetes, and cancer.
Lowering prescription drug prices is part of Democrats’ $3.5 trillion spending package that was advanced by the Senate earlier this week. Democrats said they anticipate “hundreds of billions” of savings by lowering drug prices.
The pharmaceutical industry and Republican lawmakers are expected to oppose the president’s plan. They argue that capping prices reduces investment in developing life-saving medicines.
The conservative activist group FreedomWorks called Mr. Biden‘s proposals a plan to “impose socialist drug price controls” that would hurt “the very same patients that he claims he wants to help.”
“Like other countries who have socialist drug price controls, the unintended consequences of this policy in the U.S. will result in limited access to new medicines, an overburdened health care system, and shortages for medical equipment,” the group said in a statement.
Senate Finance Committee Chairman Ron Wyden, Oregon Democrat, is trying to draft legislation targeting prescription drug prices that he believes can garner GOP support.
On average, Americans pay as much as three times more than people in other countries for prescription drugs, according to a White House fact sheet.
The AARP said last month that the insurance-negotiated prices of 260 brand-name prescription drugs have risen faster than inflation every year since 2006. Last year, brand drug prices increased by 2.9%, its lowest average increase since 2006. But that rate still surpassed the country’s inflation rate of 1.3%, according to the report.