White House Kills Off Major Drug Pricing Reforms as Democrats Fail to Coalesce


White House Kills Off Major Drug Pricing Reforms as Democrats Fail to Coalesce Around Medicare Negotiation Plan

By Zachary Brennan

October 28, 2021

Just before departing for Europe this afternoon, President Joe Biden made clear that major drug pricing reforms are unlikely to cross the finish line in the final $1.75 trillion social spending bill from Democrats.

The announcement is a major step back for Biden, who in August pledged that the government would save hundreds of billions from Medicare negotiations, and Democrats in general, who have tried to open up negotiations for years to no avail.

Biden on Thursday released a framework to help congressional negotiators figure out the final details of the bill, but noticeably absent was any mention of allowing Medicare to negotiate drug prices, which industry had fought tooth and nail to defeat as pay-for for the Build Back Better Act.

“At the end of the day, there are not yet enough votes to get something across the line that will deliver what the American people need and expect on prescription drugs,” a White House official said on a call with reporters Thursday morning.

Alex Lawson, executive director of the nonprofit Social Security Works who’s been working on the negotiations, confirmed to Endpoints News that Medicare negotiations are officially dead.

What the Biden framework does still include is a repeal of a Trump-era rebate rule, which it expects will save about $145 billion as it would’ve increased seniors’ drug premiums. But the Biden administration could’ve repealed that rule without the help of Congress, and $145 billion is a far cry from the CBO’s previous estimate that Medicare drug price negotiations would’ve saved $450 billion over 10 years, based on its analysis of a prior drug pricing bill from House Speaker Nancy Pelosi.

So who’s to blame for dropping the ball on major drug pricing reforms? Swarms of pharmaceutical industry lobbyists are the big winners. And a handful of Senate Democrats, like New Jersey Sen. Bob Menendez, have been reluctant to come on board with Medicare negotiations as the industry has made clear that it could come at the cost of new drugs.

Sean Dickson, drug pricing expert at West Health, told Endpoints he’s still waiting to hear more details on the penalties that may occur when drug prices increase faster than the rate of inflation. Sen. Ron Wyden (D-OR), who’s spearheading the drug pricing part of the negotiations, previously said he secured agreement with the parliamentarian on the inclusion of the penalties.

“I’ll note that absent reforms that reduce drug prices, 1.1M seniors are expected to die prematurely due to cost-related non-adherence over the next 10 years,” Dickson said.

David Mitchell, a cancer patient and founder of Patients For Affordable Drugs Now, said in a statement in response to Biden’s framework: “The lack of provisions to lower drug prices in the Build Back Better framework is a huge failure that will harm millions of Americans who are counting on Democrats and the president to deliver on their promises and provide desperately needed relief.”

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