Biden budget wants to more than double number of negotiated drugs under Medicare, and eliminate hepatitis C
President Joe Biden on Thursday unveiled his 2024 budget, which is packed with lofty goals that may never see the light of day because Congress controls the federal purse strings and Republicans control the House.
Even still, the wide-ranging budget looks to immediately build off the Inflation Reduction Act by rapidly expanding the number of drugs that will be negotiated and decreasing the amount of time that small and large molecule drugs will go without negotiations, from 10 years for small molecules and 13 years for biologics to just five years for both small and large molecule drugs.
The shift would have a much more significant impact on biopharma R&D than the original IRA, which the Congressional Budget Office projected would cut only about 10 drugs over 30 years.
HHS officially declined to comment on the updated negotiation numbers, but then leaked them to reporters from Bloomberg and Politico, who noted on Twitter that the number of drugs to be negotiated will also increase from 140 drugs to 300 drugs from 2024 to 2033. CMS did not respond to a request for comment.
Five years? I think I'm pretty open minded on drug price negotiation but that is just bonkers. Vertex got Kalydeco approved in 2012. 2017 was their first year of profitability. Basically nothing would get an ROI anymore. https://t.co/lR89bdJfdN
— Brian Skorney (@BrianSkorney) March 9, 2023
Altogether, those tweaks are estimated to amount to $160 billion in savings over 10 years.
Meanwhile, Biden also included another $11 billion over the next 10 years on a plan to eliminate hepatitis C nationwide over five years, as former NIH Director Francis Collins indicated was coming earlier this week.
In a JAMA Viewpoint published today, Collins and the White House’s Rachael Fleurence wrote, “The program aims to significantly expand screening, testing, treatment, prevention, and monitoring of hepatitis C infections in the United States, with a specific focus on populations at the greatest risk for infection.”
They also noted that although the price tag might seem steep, the savings from such a program would be monumental over time.
The costs of this outreach effort will reach several billion dollars over 5 years — a sizable investment, but less than the savings that economists project would be generated in the future by preventing tens of thousands of expensive cases of liver failure and liver cancer. Recent data also showed that the benefits of treating hepatitis C extend beyond liver disease to diabetes and kidney disease, making the savings from cures likely to be even greater.
Other notable funding increases and provisions in Biden’s budget include:
- $1.4 billion over 10 years to cap insulin cost-sharing at $35 in commercial plans, building on the IRA’s out-of-pocket cap for those in Medicare.
- $670 million over five years to expand and modernize regulatory capacity and infrastructure to respond to any future pandemic or biological threat.
- $521 million in additional budget for FDA.
- $50 million to the FDA to advance the president’s Cancer Moonshot goals, with new funds to expand resources and collaborations around diagnostic and therapeutic products to treat rare cancers, and other efforts to address cancer morbidity and mortality.
- $10 million more to support a range of medical product safety activities.
- Expand drug shortage notification requirements to include situations when a manufacturer is unlikely to be able to meet an increased demand.
