The Biden administration has unveiled its road map to lower the cost of prescription drugs.
Health and Human Services Secretary Xavier Becerra introduced the 29-page plan Thursday morning—which centers on legislation that would allow the government to negotiate prices of the most expensive drugs, then pass along those savings to private insurance companies. Currently, there are legal blockades to federal officials doing so.
The plan also calls for a reduction in the number of regulatory barriers required to get a drug approved by the Food and Drug Administration. It would boost competition among drugmakers by shortening exclusivity periods and speeding the entry of generic competitors.
“Lifesaving prescription medication should not cost anyone their life savings,” said Becerra in a statement. “Yet too often, many low-income families cannot take their prescription medications because of cost concerns…By promoting negotiation, competition, and innovation in the health care industry, we will ensure cost fairness and protect access to care.”
Americans, according to the plan, spend an average of over $1,500 per person on prescription drugs, paying much more than comparable nations. Because the cost of those medications is rising so fast, many people do not take them as prescribed.
The plan also calls for a cap on catastrophic spending to protect beneficiaries from unaffordable out-of-pocket costs. And it would prohibit “pay-for-delay” agreements between drugmakers, which result in delays to generic versions for brand-name drugs.
Lowering prescription drug costs has been a priority for both political parties. Former President Donald Trump stated that he hoped to make it a priority of his administration before the COVID-19 crisis hit. Given the longevity and severity of the pandemic, Biden’s proposal is likely to receive a bigger push. (Many states are attempting to pass their own regulations separately.)
Big Pharma, however, has been resistant to previous proposals.
More health care and Big Pharma coverage from Fortune:
- “Munchausen by Internet” and the dangers of self-diagnosing mental health issues on TikTok
- Why South Africa’s COVID outbreak is raising alarms
- The psychology behind why people will take horse paste, but not COVID vaccines
- Why more companies like Nike are closing their offices for a mental health break
- Commentary: Paid family and medical leave is a civil right
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