The impact of Biden’s drug price negotiations

Aug 30, 2023, 11:56am EDT
U.S. President Joe Biden and Vice President Kamala Harris.
REUTERS/Leah Millis
politicsNorth America
Semafor Staff/

For the first time, Medicare will negotiate drug prices. President Biden on Tuesday rolled out a list of the inaugural ten drugs that will be eligible for talks under the Inflation Reduction Act — and his campaign is already featuring its policy in ads.

“Today is the start of a new deal for patients where Big Pharma doesn’t get a blank check at the expense of the American people,” Biden said at a White House event touting the new program. Not so fast, though: Drug companies are suing to block the law, arguing it’s unconstitutional.1

While the law’s savings are expected to increase over time, the first round of drugs may be a relatively modest start. “Most of the drugs are already expected to face competition from cheaper generic versions within two years or less of the price caps taking effect in 2026,” the Washington Post noted.2

Donald Trump broke with many Republicans by backing federal negotiations and price caps on drug prices, including a late-term executive order intended to eventually tie drug reimbursements to international prices.3 In a press release Tuesday, he attacked Biden for reversing an unrelated 2020 executive order compelling the federal government to only purchase certain drugs and medical supplies produced in the U.S.4

Mike Pence criticized Biden’s plan and sounded like he was returning to his pre-Trump conservative roots on drug policy. “I would have concerns about, ultimately, being able to use the power of the government to impose price controls under the free market,” he told Semafor on a call with reporters. The broader 2024 field has not discussed the issue much.5

Drug negotiations are perhaps the single best-polling idea in American politics. A new survey by left-leaning Data For Progress found 90% of likely voters favored “giving Medicare more power to negotiate lower prices for all prescription drugs,”6 while other pollsters have found similarly wide support.7