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The Biden administration unveils plan to reduce drug prices

A key provision is allowing Medicare to negotiate medication pricing

The White House has unveiled an ambitious plan to lower prescription drug prices, an issue that has gained support in both the Republican and Democratic parties.

The plan backs efforts among Democrats in Congress to pass legislation to drive down drug costs. It calls for allowing Medicare to negotiate with pharmaceutical companies for lower drug costs — something not allowed under current law.

Supporters of that provision say the government would save billions of dollars on drug costs for seniors while the population at large would also see prices come down.

The plan would establish new administrative measures that would cut red tape while offering federal funding for research into new treatments.

Consumers have long complained that drug pricing is unnecessarily complicated and confusing. D. of Norwood, Pennsylvania, recently told ConsumerAffairs that even their benefits provider was confused about prices.

“I was quoted a price and as a result decided to use GoodRX,” D. wrote in a ConsumerAffairs review. “When I went to pick up the drug at the pharmacy the pharmacist informed me that my insurance price actually was cheaper than GoodRX. That was not what I had been told, this price was about $40 cheaper than what I was quoted.”


The White House says its plan is aimed at making drug prices more transparent as well as affordable. In recent years, physicians have joined patients in urging action to keep prices in check, especially older drugs that haven’t been improved but also have no competition.

“The Biden-Harris Administration remains committed to making health care more affordable for American families, and this Plan outlines one key way we will do that,” Department of Health and Human Services Secretary Xavier Becerra said in a statement. “By promoting negotiation, competition, and innovation in the health care industry, we will ensure cost fairness and protect access to care.”

The plan is likely to face strong opposition from the pharmaceutical industry. The Pharmaceutical Research and Manufacturers of America has been running television ads that claim consumers would have fewer choices if Medicare were allowed to negotiate drug prices.

Last month the group cited a Congressional Budget Office (CBO) report that it said shows the drug pricing policy pushed by House Speaker Nancy Pelosi, D-Calif., would lead to 60 fewer new treatments in the next three decades.

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