Hundreds of thousands of older Americans could pay less for some of their outpatient drug treatments beginning early next year, the Biden administration announced Thursday.
The White House unveiled a list of 48 drugs — from chemotherapy treatments to growth hormones used to treat endocrine disorders — whose prices increased faster than the rate of inflation this year. Under a new law, drugmakers will have to pay rebates to the federal government because of those price increases. The money will be used to lower the price Medicare enrollees pay on the drugs early next year.
“For years, there’s been no check on how high or how fast big pharma can raise drug prices,” President Joe Biden said Thursday, speaking in a lab at the National Institutes of Health in Bethesda, Maryland. “Let’s call this for what it is – it simply is a rip off. They’re ripping off Medicare. They’re ripping off the American people. We’re now fighting back.”
This is the first time drugmakers will have to pay the penalties for outpatient drug treatments under the Inflation Reduction Act, passed by Congress last year. The rebates will translate into a wide range of savings — from as little as $1 to as much as $2,700 — on the drugs that the White House estimates are used every year by 750,000 older Americans.
The types of drugs on the government’s list vary. They include generic drugs, medications taken orally or injected, and treat a variety of disorders or illnesses, according to a review by the American Society of Health-System Pharmacists of the administration’s list.
But all of the drugs, the White House said, raised their prices significantly this year, many by nearly 20%.
The price decreases will only be seen for patients who access the drugs on Medicare Part B, the government outpatient care coverage. But the rebates are “an important tool to discourage excessive price increases,” Chiquita Brooks-LaSure, the administrator for the Centers for Medicare and Medicaid, said Thursday in a statement.
Only a small number of drugs met the criteria for penalties, pointed out Stephen Ubl, the president of the Pharmaceutical Research and Manufacturers of America, also called PhRMA.
“It’s a tiny fraction of overall working medicines,” he said.
As it readies for a 2024 reelection campaign, the Biden administration has rolled out a number of efforts to push pharmaceutical companies to lower drug prices. Last week, the White House announced it was considering an aggressive, unprecedented new tactic: pulling the patents of some drugs priced out of reach for most Americans.
“On no. We’ve upset Big Pharma again,” the White House posted on the social media platform X, formerly Twitter, last week, just hours after the announcement.
The president plans to make his push for lower drug prices a central theme of his reelection pitch to Americans.
The U.S. Health and Human Services agency also released a report on Thursday that will help guide its first-ever negotiation process with drugmakers over the price of 10 of Medicare’s costliest drugs. The new prices for those drugs will be negotiated by HHS next year, in the middle of next year’s presidential campaign.