Biden administration supports government negotiation of drug prices

President Joe Biden delivers remarks on his economic agenda, which includes plan to lower prescription drug prices. File Photo by Sarah Silbiger/UPI
President Joe Biden delivers remarks on his economic agenda, which includes plan to lower prescription drug prices. File Photo by Sarah Silbiger/UPI | License Photo

Sept. 9 (UPI) -- The Biden administration said in a report released Thursday it backs direct government negotiation of prescription drug prices.

The report identifies "lack of competition," as a key factor driving high prescription drug costs.


The U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation, which released the report, said in a statement that it came in response to President Joe Biden's Executive Order 14036, "Promoting Competition in the American Economy," to address lack of competition across economic sectors.

"It is also the policy of my Administration to support aggressive legislative reforms that would lower prescription drug prices, including by allowing Medicare to negotiate drug prices," the executive order on competition stated.

"Otherwise, market failures resulting from the lack of competition mean high drug prices are simply shifted to workers, employers, and taxpayers, who pay premiums and fund public insurance programs," the report added.

The government would directly negotiate prices for drugs in Medicare Parts B and D under the HHS plan. Other legislative options under the plan include capping out-of-pocket costs on Medicare Part D, and banning "pay-for-delay" agreements that block generic competition to brand-name drugs, and other anti-competitive practices by drug manufacturers.


"The authority to negotiate directly with drug manufacturers would enable the Secretary to leverage the purchasing power of these programs more effectively, particularly for high-priced drugs for which there are no competitors, and where private plans of providers may be be less able to negotiate lower prices," the report stated.

"Our overall goals are to foster innovation, harness market forces, and improve the market environment, all in pursuit of reduced spending for consumers and the health care system," the report concluded. "This goal can be achieved by implementing real, equitable solutions. One of the key policies in this effort is legislation that would allow the Secretary of HHS to negotiate drug prices directly with pharmaceutical companies."

Democrats' $3.5 trillion budget reconciliation proposal similarly supports "President Biden's call to give Medicare the power to negotiate lower prescription drug prices."

House Democrats passed a similar provision in a major drug pricing bill a couple years ago, but it never passed into law, and some in the party's centrist wing have vowed to oppose drug price negotiation, Politico noted.

Politico added that the plan stopped short of supporting "march-in rights" to pull patent rights from drugs that are unreasonably expensive though the plan said it would give "due consideration," to such petitions.


Sen. Elizabeth Warren, D-Mass., Sen. Amy Klobuchar, D-Minn. and Rep. Lloyd Doggett, D-Texas, wrote a letter to HHS Secretary Xavier Becerra last month urging HHS to use "march-in rights" to lower prescription drug prices.

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