IE 11 is not supported. For an optimal experience visit our site on another browser.

Biden calls on Congress to tackle soaring prices of prescription drugs

Democrats are expected to address the rising costs in their $3.5 trillion budget reconciliation plan.

WASHINGTON — President Joe Biden on Thursday urged Congress to take steps to lower the cost of prescription drugs in the United States, including allowing Medicare to negotiate drug prices directly and penalizing drugmakers who raise prices faster than inflation.

"For years, the price of many prescription drugs has dramatically outpaced inflation," Biden said in a speech at the White House. "These prices have put the squeeze on too many families and stripped them of their dignity."

Drug prices have been a nagging issue for American politicians. Former President Donald Trump also spoke frequently of the need to lower prices and called for some of the same policy solutions as Biden, but was unable to garner support in Congress.

Biden said that Medicare is allowed to negotiate prices for every type of health care service except prescription drugs, which leads to increased costs for consumers.

He urged Congress to allow Medicare to negotiate across the board — not just the most expensive drugs, as some lawmakers have proposed — and said that the negotiated prices would reflect the drugmakers' costs of research and development and would still provide a "significant profit" to the pharmaceutical companies.

Biden said that the Medicare-negotiated price should also apply to people who get insurance through private companies. He also said his plan would cap the amount of money seniors spend on prescription drugs each year at no more than $3,000 a year, or $250 a month.

Americans spend an average of about $1,300 a year on prescription drugs — more than any other country in the world — according to data from the Organization for Economic Cooperation and Development. Prescription drug costs in the U.S. have risen by 33 percent since 2014, according to some estimates, with insulin and rheumatology drugs experiencing some of the steepest price increases.

Democrats are expected to address the high cost of prescription drugs in their $3.5 trillion budget reconciliation bill, which they are pushing to pass in tandem with the bipartisan infrastructure bill that cleared the Senate on Tuesday. Biden was criticized by some members of his party earlier this year for initially leaving out efforts to lower prescription drug prices from his American Families Plan.

Approximately 3 in 10 adults report not taking their medicines as prescribed at some point in the past year because of the cost, according to a June report from the nonpartisan Kaiser Family Foundation. The report also found that a majority of adults support a number of proposals to allow the federal government to negotiate with drug companies to get a lower price on medications.

"This isn’t a partisan issue. Alzheimer's, diabetes, cancer — they don't care whether you're a Democrat or Republican," Biden said. "This is another area where we can come together to make a difference in people’s lives."

Drugmakers are adamantly opposed to government efforts to curb prices, and some Republicans have also been reluctant to take federal action.

Biden applauded the pharmaceutical industry Thursday for developing lifesaving Covid vaccines at a historic speed, but encouraged Americans to "make a distinction between developing these breakthroughs and jacking up prices on a range of medications for a range of everyday diseases and conditions."

A 2020 report from the House Oversight Committee found that enormous drug company profits are the primary driver of soaring prescription drug prices in America, and have little to do with research and development or industry efforts to help people afford medication, as drug companies often claim.

Biden said Thursday that companies right now do not put enough of their profit toward research and development, rather "too many companies use it to buy back their own stock, inflate their worth, drive up CEO salaries and compensation."

To bridge the gap, he proposed creating a $6.5 billion agency within the National Institutes of Health called Advance Research Projects Agency that would help speed up cutting-edge research in treatments and cures for diseases such as Alzheimer's, diabetes and cancer. The program would be modeled similarly to the Defense Advanced Research Projects Agency, or DARPA, Biden said.

"I'm not criticizing companies that aren't prepared to spend billions of dollars on certain projects for research. I get it." he said. "But if they're not, we should."

Biden signed an executive order in July asking the Food and Drug Administration to work with states and tribes to import prescription drugs from Canada, where they are sold at a much lower price.

He also directed the Federal Trade Commission to ban "pay for delay," a practice in which brand-name drug manufacturers pay generic manufacturers to stay out of the market to avoid any competition that could reduce the price of the drug for consumers.