In SOTU, Biden will ask Congress to expand IRA price negotiation program: reports

With President Joe Biden girding for a significant challenge from former President Donald Trump in his reelection bid in November, Biden undoubtedly will emphasize his success in leading the passage of the Inflation Reduction Act (IRA) and its measures to cut healthcare costs.

Tonight, as Biden makes his State of the Union address, he is expected to reveal a push to double down on his drug price initiatives outlined in the IRA. According to HuffPost and CBS News, citing senior administration officials, Biden will urge Congress to expand the Medicare drug price negotiations to 50 drugs per year, instead of the 20 previously specified by the IRA.

Negotiations currently are underway between the Centers for Medicare & Medicaid Services and companies over the price of the top 10 drugs on which the government spends the most. Those prices are due to go into effect in 2026. As it is currently drawn up, the program eventually expands to 20 drugs per year.    

Several biopharma companies and industry organizations have filed lawsuits challenging the constitutionality of the IRA negotiations. Over the last three weeks, federal courts in Texas and Delaware tossed out separate lawsuits from industry lobbying group PhRMA and AstraZeneca.  

In advance of the SOTU address PhRMA spokesperson Sarah Ryan said that the IRA already is having "unintended and harmful consequences that are creating barriers for patients" and stifling R&D.

“Over the last year, investment in small molecule development has declined and insurers are now offering fewer Part D plans because of the IRA," Ryan added. "Expanding this bad policy and giving government bureaucrats even more power over individual health care decisions only exacerbates these issues.”

In a New Jersey federal court this week, Bristol Myers Squibb, Johnson & Johnson, Merck and Novo Nordisk—all companies with drugs on the 2026 negotiations list—are presenting arguments in their cases against the IRA. After filing separate lawsuits, the companies banded together in their challenge against the government.  

Thursday night, Biden also will ask Congress to expand the IRA’s plan to cap the out-of-pocket cost of drugs to Medicare recipients at $2,000 per year starting in 2025. Now Biden wants the provision to apply to everyone in the U.S. who has healthcare insurance.

Throughout his tenure, Biden has repeatedly cast himself in opposition to the industry. During a speech in Florida in early November, 2022, Biden crowed: “We finally beat pharma,” in reference to passage of the IRA earlier that year.