At his vacation home in Delaware, President Joe Biden made the striking announcement that he is dropping out of the 2024 presidential race, shaking up the Democratic ticket after weeks of pressure.
As Biden wraps up his 50-year plus political career, the Pennsylvania native leaves behind a legacy that includes major legislation in the healthcare field. High drug prices have long been a top target for Democrats, but Biden can claim a significant achievement by enabling the first Medicare price negotiations under the 2022 Inflation Reduction Act (IRA).
In his Sunday announcement, Biden touted "lowering prescription drug costs for seniors" among his administration's key victories.
The IRA marks the most significant drug pricing reform to date and allows Medicare to negotiate the price tags of its 10 costliest prescription drugs in 2026, with the roster of negotiated drugs growing in subsequent years. According to a prior estimate from the Congressional Budget Office, the sweeping bill could save the U.S. government $164 billion over 10 years.
Besides Medicare price negotiations, the law imposes penalties when prices rise faster than the rate of inflation, and caps out-of-pocket for Medicare beneficiaries.
Efforts from drugmakers to contest the law have been shut down in the courts, although some companies are continuing the fight with recent appeals.
Biden’s signature on the IRA epresented a major notch on his political belt after he made drug prices a significant factor of his 2020 campaign.
“I got here as a 29-year-old kid,” the president said in remarks published after signing the act. “We were promising to make sure that Medicare would have the power to negotiate lower drug prices back then—back then—prescription drug prices.”
“But guess what? We’re giving Medicare the power to negotiate those prices now, on some drugs,” he said.
Biden also claims the $35 monthly cap on insulin as a triumph. Insulin price cuts were voluntary moves by Eli Lilly, Sanofi and Novo Nordisk but the president cites pressure from the IRA, which set the $35 insulin price for Medicare beneficiaries, as a key influence in the decisions.
After announcing that he's no longer running for president, Biden quickly endorsed Vice President Kamala Harris as the Democratic nominee.
With Harris now forming her election campaign, industry watchers will be keen to watch for any potential healthcare-related policy pronouncements.
According to the White House, she cast the “decisive vote” to pass the IRA. Part of her campaign during her bid prior for the presidency centered on a Medicare for All plan, plus a “serious audit” of prescription drug costs, she wrote in a 2019 Medium post.