The mystery drugs President Biden didn’t name during his speech on prescription meds

Working with David Whitrap of the Institute for Clinical and Economic Review (ICER), an independent nonprofit that evaluates whether drugs are worth their costs, Fortune has identified strong candidates for all of them. Examining those drugs specifically offers valuable clues to how Biden’s plan for cutting drug prices could play out.

The main element of Biden’s plan is allowing Medicare to negotiate the prices it pays to pharmaceutical companies. That’s prohibited under current law, so the change would require an act of Congress. Biden also wants to go a giant step further: “Drug companies would have to sell their drugs to all distributors at the Medicare price or face up to a 95% excise tax,” he said in his speech.

So virtually everyone, including Americans who get their medical insurance through their employers, would get at least some of their meds from distributors that paid the same price, the Medicare price. How Medicare would negotiate that price thus becomes a hugely important question.

Biden said Medicare would negotiate “based on a fair price, one that reflects the costs of the research and development and the need for providing for a profit.” But the White House “Fact Sheet” that accompanied the text of Biden’s speech doesn’t mention R&D costs or profits; it just says, “Medicare negotiators would be provided a framework for what constitutes a fair price for each drug.”

Estimating “a fair price” for drugs is what ICER does. It considers the improvement in life quality a drug provides, and for how long; then it applies findings by economists and medical researchers to determine a threshold cost for each quality-adjusted year of life a drug enables. If a drug costs more than that threshold, it isn’t worth the cost; the money would be better spent on other, more cost-effective treatments. That approach to evaluating drug prices is used by several national health authorities around the world and by the U.S. Department of Veterans Affairs.

By that standard, how do Biden’s unnamed drug examples stand up?

Drug No. 1

What Biden said: “For more than 1 million Americans living with multiple sclerosis, one common drug for that disease costs $7,100 per month. The price has gone up 1,000% over the last 20 years without any change in the drug.”

The drug: “I suspect the MS agent is Copaxone [made by Teva Pharmaceutical Industries Ltd.],” Whitrap says. “But it could also be Avonex [Biogen] or Betaseron [Bayer]. All three were introduced more than 20 years ago and are priced in that general range.”

Is it worth its cost? “We feel that entire class of drugs is overpriced compared to the benefits patients receive,” Whitrap says. “In our 2017 review of MS therapies, we recommended that Copaxone receive a 67% to 85% discount off its list price in order to meet common thresholds for cost-effectiveness.”

Teva did not respond to a request for comment.

Drug No. 2

What Biden said: “For more than 1 million people with rheumatoid arthritis, a common prescription drug used to cost about $1,350 per month; that was when it was introduced back in 2003. Today, the same drug costs $7,700 per month – over five times more expensive without any change.”

The drug: This “is certainly Humira [made by AbbVie],” Whitrap says.

Is it worth its cost? “When we reviewed Humira as a treatment for rheumatoid arthritis back in 2017, we calculated that its list price would require a discount of between 55% and 69% to reach what we would consider a fair price.”

AbbVie did not respond to a request for comment.

Drug No. 3

What Biden said: “An expensive drug for a cancer called multiple myeloma can cost $20,000 a month. Twenty thousand dollars. People who need that drug pay an average of $1,300 a month out of pocket even with Medicare.”

The drug: Whitrap said several multiple myeloma drugs are in that price range—Pomalyst (Bristol Myers Squibb), Darzalex ( Johnson & Johnson), Kyprolis (Amgen), and others.

Is it worth the cost? When ICER evaluated those drugs in 2016, conclusions were difficult because the drugs were often used in combinations. ICER this year evaluated a new generation of multiple myeloma treatments, Whitrap says, “including a cell-based therapy, Abecma [Bristol Myers Squibb and Bluebird Bio], that has a list price of $419,500 per treatment. Given Abecma’s benefits, we felt a fair price would be between $192,000 and $265,000.”

A Bristol Myers Squibb spokesperson tells Fortune, “Medicare patients need meaningful affordability reforms, including an annual cap on their Part D out-of-pocket costs to lower and make cost sharing more predictable. We support and advocate for patient affordability and firmly believe any industry pay-fors must pass savings on to seniors to help offset costs at the pharmacy counter while protecting innovation.” 

ICER’s evaluations don’t always find that drugs are overpriced. “Of the 120-plus drugs ICER has reviewed over the past five years, we’ve found about 33% of them to be cost-effective at their current prices,” Whitrap says. The organization even found that the most expensive drug in America, Zolgensma (Novartis), a therapy for a rare childhood disease called spinal muscular atrophy, is worth its price of $2.1 million for one course of treatment. If Medicare were to use a “fair price” standard like ICER’s, at least some drugs might not be affected.

But that assumes Congress authorizes Medicare to negotiate drug prices, which is far from certain. Policymakers and legislators have talked about it for years. This year and next, with Democrats holding both chambers of Congress and the White House, may be the idea’s best chance yet.

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