Biden Administration Has Options for Drug Pricing Reform

Democratic lawmakers are discussing a plan that would allow CMS to negotiate the price of certain medications and place a cap on Medicare beneficiaries’ out-of-pocket spending, an effort they hope could lead to the resuscitation of the drug pricing controls contained in the Build Back Better Act (BBBA). While those talks are far from a sure thing to pass, the Biden administration could institute policies to combat high drug prices that do not need congressional approval, according to health policy experts who participated in a Kaiser Family Foundation (KFF) webinar on May 23.

Rachel Sachs, an attorney and professor at the Washington University School of Law in St. Louis who spoke during the webinar, said the administration could particularly make an impact in federal insurance programs such as Medicare and Medicaid. One way could be via the approval of certain Section 1115 Medicaid waivers that states request. For instance, in Oregon’s Section 1115 renewal application in February, the state asked CMS for permission to exclude from its Medicaid formulary drugs approved under the FDA’s accelerated approval program that have “limited or inadequate evidence of clinical efficacy.”