Biden to sign order to explore ways to lower prescription drug costs
President Biden will sign an executive order on Friday to explore additional ways his administration can lower prescription drug costs.
The order directs the Department of Health and Human Services (HHS) to examine how it can use its Innovation Center to lower drug costs, the White House said in a press release. The Innovation Center, which was created under the Affordable Care Act, develops and tests new payment and delivery models for Medicare and Medicaid.
After about three months, HHS will submit a report outlining it plans to use the Innovation Center to lower drug costs and promote access to new drug therapies for Medicare participants, the White House said.
Friday’s executive order aims to build on the Inflation Reduction Act’s drug pricing reforms.
The law, which was passed and signed into law in August, allowed Medicare to negotiate drug prices for the first time and placed caps on the cost of insulin under Medicare and drug costs for seniors on Medicare.
It also requires drug manufacturers to pay rebates to Medicare if price increases exceed the rate of inflation. The prices of more than 1,200 prescription drugs rose faster than the rate of inflation between 2021 and 2022, with the prices of some drugs rising more than 500 percent, HHS found in a September report.
However, Republicans — all of whom voted against the law — aim to undo the changes that Biden has touted.
Senate Republicans introduced a bill last week to roll back the drug pricing reforms, arguing that “price controls never work” and that high prices demonstrate a need for “more competition.”
The announcement by the White House comes just one day after the release of the cost of living adjustment to Social Security payments. Social Security payments will increase by $140 per check, an 8.7 percent increase that attempts to close the gap on high prices. The increase is the largest in 40 years.