Biden and Harris promote price reductions for Medicare drugs at joint rally

The bill, which passed the Senate on August 7, 2022 thanks to Harris's decisive vote, allowed the federal government for the first time to negotiate drug prices with the country's pharmaceutical manufacturers.

Two years after its passage, the IRA was hailed by Biden and Harris as a landmark victory over the pharmaceutical industry, benefiting not only seniors on Medicare plans but also U.S. taxpayers to the tune of hundreds of billions of dollars.

“We finally defeated Big Pharma,” Biden said as the enthusiastic crowd chanted “Thank you, Joe.”

He denounced the pharmaceutical industry's “huge profits” and warned that if Harris's opponent, Donald Trump, and his allies in Congress win in November, they would try to limit the government's ability to negotiate prices, as the Heritage Foundation proposes in its “Project 2025” roadmap for the next Republican presidency.

“They want to take away Medicare's power to negotiate drug prices and allow the drug companies to charge whatever they want again,” he said. “I want to tell you what our Project 2025 is: We have to give them hell.”

In introducing Biden, Harris – who secured the Democratic presidential nomination earlier this month – signaled her intention to promote consumer price relief as one of the central themes of her campaign in the coming weeks.

“I've worked my entire career to hold wrongdoers accountable and lower prescription drug costs,” she said. “Medicare can use this (collective bargaining) power to compete on equal terms with big pharma and negotiate lower drug prices.”

The rally came hours after the Department of Health and Human Services announced it had successfully negotiated huge price cuts on 10 of the most expensive prescription drugs for Medicare Part D users starting in January 2026.

As part of the agreement announced Thursday, the Biden administration said it had reached agreements with major drugmakers to renegotiate lower drug prices for the first 10 drugs selected for its Medicare drug price negotiation program.

These new prices will reduce the list price of the drugs by 38 to 79 percent, reversing a trend of steadily rising prices since their introduction. The government said this will save U.S. consumers $1.5 billion in out-of-pocket costs.

The pharmaceutical industry sharply criticized the agreements on Thursday. The pharmaceutical company Novartis said in a statement that the IRA's pricing provisions were “unconstitutional and would have long-term and devastating consequences for patients by limiting access to medicines now and in the future.”

The heart failure drug Entresto is on the list of ten drugs that will receive a first tranche of price reductions. This tranche will reduce the cost of a 30-day supply by 53 percent.

The company said it was forced to comply with the process because its only other options were “catastrophic fines or removal of all of our products from Medicare and Medicaid.”

“The pricing process is neither objective nor transparent and does not reflect the true value of a medicine,” it said.

Also on the list is Stelara, from Janssen Biotech Inc., which is prescribed to treat psoriasis, psoriatic arthritis, Crohn's disease, ulcerative colitis and other conditions.

Currently, it is used by 23,000 Medicare beneficiaries. The list price for a 30-day supply is $13,836, but under the price reduction program, that cost will be reduced by 66% to $4,695. The out-of-pocket cost for a Medicare beneficiary who currently pays $3,459 per month for Stelara will be reduced to $1,174 by 2026, the administration said.

Under the program, Medicare will select up to 15 additional Part D drugs for negotiation in 2025, up to 15 additional Parts B and D drugs in 2026, and up to 20 drugs each year thereafter.

Also under the IRA, some Medicare Part D enrollees who have high drug costs have had their out-of-pocket costs capped at about $3,500 per year. In the first quarter of this year, more than 260,000 people in the catastrophic coverage phase benefited from this cap, meaning they won't have to pay anything out of pocket until the end of 2024.

Starting in January, benefits will be expanded: For all Part D holders, the deductible costs will be capped at $2,000, the HHS said.

Harris is expected to further explore the issue of consumer protection during a solo appearance in the swing state of North Carolina, where she will denounce high food prices and blame major food companies for their monopoly power and price gouging.

Meanwhile, Trump has planned a rally in Pennsylvania, another swing state, as Democrats prepare for the party convention that begins next week in Chicago.