Biden doubles down on drug pricing in 2024 budget — but boosts R&D

President Joe Biden released his $6.9 trillion 2024 fiscal year budget proposal last week, and while many of his biggest requests aren’t likely to make it past Congress, one initiative is clear: Pharma remains the administration’s hottest target.

At the beginning of his speech laying out the proposal, the president highlighted drug pricing reform as a top priority, echoing a refrain industry leaders have heard for years.

“Because of the law that I worked on for decades that I just signed last year, we took Big Pharma on, and we won,” Biden said, touting pricing measures passed in last year’s Inflation Reduction Act (IRA). “If your tax dollars don’t have to go paying all of that exorbitant price for Medicare to drug companies and it’s rational, it’s going to save $160 billion.”

Now, Biden’s trying his luck again with a slew of new prescription drug measures aimed at extending policies implemented in the IRA, which the administration argues could save the country an additional $200 billion over the next decade. For instance, the budget proposes decreasing the time between when a drug is launched and when it enters Medicare price negotiations, as well as increasing the number of drugs eligible for negotiation. It also would give the HHS authority to negotiate Medicaid drug rebates for states.

Other IRA provisions, including the $35 monthly cap on out-of-pocket insulin costs for Medicare recipients and the inflationary rebate would extend to commercial health insurance under Biden’s budget.

None of these policies are final, though. For now, the budget announcement has kicked off what will almost certainly be a contentious, monthslong spending battle in the divided Congress — and Republicans and industry groups are already digging in.

In a statement released shortly after the budget proposal, Rep. Cathy McMorris Rodgers (R-Wash.), who chairs the House Energy and Commerce Committee, argued that the president’s spending plan “double(s) down on government price setting policies from the IRA that have already stopped new and potentially life-saving treatments from reaching patients.”

Leading industry lobbying groups, who will soon have a chance to give Congress feedback on the funding proposal, also expressed concern.

“The president’s plan to expand Medicare price controls is another costly blow to the millions of patients depending on innovative cures, particularly those in the rare and orphan drug space,” said Nick Shipley, chief advocacy officer at BIO.

And the lobbying group PhRMA said in a statement that the “budget proposal proves the administration favors scoring political points today by sacrificing innovative new treatments and cures for patients tomorrow.”

Health agency funding

Still, Biden’s budget has been endorsed by other industry groups, including the Alliance for a Stronger FDA, increasing investment in federal health agencies that support drug development.

It proposes $20 billion in funding over five years for pandemic preparedness programs across the CDC, FDA, NIH and Administration for Strategic Preparedness and Response, including $5 million to develop more accurate models forecasting the impact of future pandemics. The budget also asks for $9 billion to fund a new payment mechanism for antibiotics, similar to what was proposed in the PASTEUR Act last year, which was widely supported by the industry.

The HHS would receive $650 million to improve its information technology — an area FDA Commissioner Robert Califf has said badly needs an upgrade. Currently, the FDA is working on an “enterprise-wide approach” to modernize its IT infrastructure for the Office of Regulatory Affairs and would receive an additional $10 million for that project under the HHS budget.

Maternal mortality rates also remain a key public health focus of the Biden administration. Last year’s omnibus bill required the FDA to update the 2015 Women’s Health Research Roadmap, which provided a strategy for expanding research into women’s health and improving outcomes, by 2025. A key focus of that effort has been on decreasing the “embarrassingly high and tragic maternal and fetal mortality issue” by spurring greater innovation, Califf said.