WASHINGTON - President Joe Biden on Thursday called on Congress to act on legislation to lower "outrageously expensive" prescription drug prices, including allowing Medicare to negotiate the prices it pays for drugs and imposing a penalty on drug companies that raise their prices faster than inflation.
During his remarks from the White House, Biden outlined several actions his administrations plans to set into motion to help ease the burden that Americans face when paying for much-needed medication.
"It’s personal to so many of us, so many of you," Biden said.
The president mentioned an executive order he signed in July that would no longer allow one drug company to monopolize the market for a new drug for 12 years, allowing for smaller companies to create generic drugs and allowing for more competition.
FILE - US President Joe Biden speaks on his Build Back Better economic agenda, in the East Room of the White House in Washington, DC, on Aug. 11, 2021. (MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)
"Right now, when a drug company seeks permission from the FDA, the Food and Drug Administration, for a certain drug, to get a patent, it’s allowed to exclusively sell that drug without competition for up to 12 years. When that time period expires, other companies can come along, make the same exact drug and sell it cheaper. It’s called generic drug. But unfortunately, it often takes a long time, years and years, for this to happen. That’s why I’ve instructed the Federal Drug Administration to get these generic drugs to consumers faster. This is going to increase competition, lower drug prices for everyone," Biden continued.
The president also said he has ordered the FDA to work with state leaders and local tribes to safely import prescription drugs from Canada, stating that the same companies that sell prescription drugs to Americans are selling the same drugs in Canada but at a fraction of the price.
In a fact sheet, the White House said Medicare should be able to "negotiate the price for a subset of expensive drugs that don’t face any competition in the market." Medicare negotiators would be given a framework for what constitutes a fair price for each drug — and there should be "powerful incentives" to make sure drug companies agree to it, the administration said.
Biden also called on drug companies to pay penalties if they raise their prices faster than inflation and to establish a cap on the amount that seniors have to pay out-of-pocket each year for prescription drugs on Thursday.
"Seniors who take expensive drugs can face unlimited exposure to high drug prices. We have to fix this," a White House fact sheet said in part.
Pharmaceutical companies have earned praise for quickly developing COVID-19 vaccines during the pandemic, which upended the economy and has killed more than 618,000 Americans. However, the pandemic has also drawn renewed attention to the high cost of drug prices.
An analysis released in January by the nonprofit 46brooklyn Research showed several major pharmaceutical companies had raised their prices on over 500 drugs, by a median of 4.6%.
"While the pharmaceutical companies have done enormous work by developing life-saving Covid-19 vaccines alongside the United States’ best scientists, crippling drug prices are unacceptable," a White House official told Reuters ahead of Biden’s speech.
The president’s remarks are part of the administration’s push for his Build Back Better agenda — which includes COVID-19 relief, a bipartisan infrastructure bill and the $3.5 trillion budget resolution passed by Senate Democrats on a party-line vote this week. The budget resolution paves the way for a sweeping $3.5 trillion spending package intended to bolster family services, health and environmental programs — even without GOP support.
The spending plan would expand Medicare to include dental, vision, hearing benefits and lowering the eligibility age, among other provisions.
Catherine Park contributed to this report. This story was reported from Cincinnati.