Medicare should negotiate prices for 50 drugs each year

President Joe Biden said Wednesday that the federal Medicare program should negotiate prices for at least 50 prescription drugs each year, up from the current goal of 20 drugs.

That's one of several new health care policy proposals Biden will outline during his State of the Union address on Thursday, according to a fact sheet released by the White House on Wednesday. Many of those efforts aim to expand parts of the Inflation Reduction Act that are aimed at making drugs more affordable for seniors and could reduce pharmaceutical industry profits.

“Medicare should not be limited to negotiating only 20 drugs per year. Instead, the President proposes that Medicare be able to negotiate prices for the main drugs that seniors depend on, such as those used to treat heart disease, cancer and diabetes.” read the information sheet.

Biden has made lowering U.S. drug prices a key pillar of his health care agenda and his 2024 re-election platform. But the fate of his new proposals will be left in the hands of a divided Congress, making It is very uncertain whether they will become law.

The president's call to increase the number of drugs eligible for negotiations with Medicare will likely face the fiercest blowback from the pharmaceutical industry.

The Biden administration is already in a bitter legal fight with several drugmakers over the talks. The administration won early victories in two separate cases on the issue this year, but the industry intends to take the matter to the Supreme Court.

The Centers for Medicare and Medicaid Services began the negotiation process last fall when it released the first 10 drugs that are subject to price negotiations with Medicare. Negotiations for those drugs end this fall and the new prices will take effect in 2026.

After the initial round of talks, Medicare can negotiate prices for 15 more drugs that will go into effect in 2027 and another 15 that will go into effect in 2028. Under the current structure, the number increases to 20 negotiated drugs per year starting of 2029.

Last year, Biden indicated he wanted more drugs to be negotiated. Wednesday marks the first time his administration specified a higher target number.

The change “will not only save billions of dollars for taxpayers, but more importantly, it will save lives and give seniors the respite they need,” Neera Tanden, the president's domestic policy adviser, said during a call with journalists on Wednesday.

The president's budget cuts federal spending by $200 billion, the White House fact sheet notes. That could increase the number of drugs Medicare could select for negotiation and bring more drugs into the negotiation process sooner.

The White House did not reveal whether the number of drugs should gradually increase to 50 after several years, or if that new number would apply starting in 2029. A senior administration official told reporters Wednesday that the president hopes to work with Congress on the details of the proposal.

“We have built a system that we are confident works and will deliver lower prices for the American people, and we believe we can expand it,” the administration official said.

Among the other policy proposals are measures to limit Medicare copays to $2 for common generic drugs and extend the $2,000 cap on out-of-pocket drug costs beyond Medicare to all private plans.

Biden also wants to expand another provision of the Inflation Reduction Act that requires drug makers to pay rebates to Medicare when their drug prices rise faster than inflation. The president wants that policy to apply to commercial drugs, not just drugs sold to Medicare.