Democrats and Republicans have pursued proposals aimed at reducing the price of prescription drugs, and it was a key tenet of Biden’s health care platform during his campaign.
With the freedom of a candidate not constrained by legislative outcomes or regulatory constraints, Biden has proposed repealing the exception that prevents Medicare from negotiating lower prices with drug companies, using the average price paid for drugs in other countries to set price ceilings, and leveraging an independent review board to determine the launch price for drugs that face no competition. These prices would be paid by Medicare and the public option, as well as private plans participating in the individual marketplace.
Additional Biden proposals call for limiting price increases beyond general inflation, with violators subject to tax penalties, and allowing consumers to import drugs certified as safe by the Department of Health and Human Services. He also supports current congressional proposals to end the tax deduction for pharmaceutical advertising and to accelerate the development of safe generics, a proposal the Trump Administration tried to advance through the regulatory process before it was struck down by the courts.
While most of these actions will require congressional approval and bipartisan support, a receptive House and Senate could find their way to a more limited set of consensus policies to reduce drug costs for patients covered by Medicare. The impact on nongovernment plans is questionable, however, and could raise issues of cost-shifting. All patients would benefit from faster access to low-cost generics, if enacted, which encompass some of the more bipartisan drug pricing proposals currently in Congress.
Due to congressional resistance to many of Trump’s drug pricing proposals, even among Republicans, the Trump Administration instead resorted to using regulatory powers to address the issue. President Trump finalized two major drug pricing proposals in his final days as President – one that would base what Medicare pays for Part B, physician-administered drugs, on the lowest price of peer nations and another that would require drug rebates to be passed on to the consumer at the point of sale. The Biden Administration has not publicly addressed whether or how it would change these policies; however, they are likely to be subject to lawsuit or delay based on questions of executive authority and administrative procedure.
Areas of bipartisanship
Even with a slim Democratic majority in the Senate, Republicans’ strong performance in the Senate elections is likely to have a moderating effect on President Biden’s plans. He may opt to focus on smaller bipartisan areas of consensus in health care policy out of the gate due to the constraints imposed by partisanship, procedure and pandemic budget pressures.
Areas of bipartisan consensus include a focus on issues plaguing rural and underserved communities, many of which are struggling to keep hospitals afloat. A bipartisan congressional task force stood up this summer aims to explore policy solutions in this area. Other bipartisan priorities could include limited drug price transparency and patent reform, maternal mortality, health equity, mental health and opioid use disorders.