ARI SHAPIRO, HOST:
President Biden took a bit of a victory lap today, celebrating what the White House says is a landmark move to lower prescription drug prices. The administration unveiled lower prices for 10 of the most expensive drugs taken by Medicare beneficiaries.
(SOUNDBITE OF ARCHIVED REOCRDING)
PRESIDENT JOE BIDEN: This time, we finally beat Big Pharma.
(CHEERING)
SHAPIRO: And Biden made sure everyone understood exactly how it happened.
(SOUNDBITE OF ARCHIVED REOCRDING)
BIDEN: And I might add...
(APPLAUSE)
BIDEN: ...With no help from Republicans. Not a single Republican voted for this bill, period; not one in the entire Congress.
SHAPIRO: He was joined at this event by Vice President Harris, who is now the Democratic presidential nominee. This is a week where she's trying to address criticism that her campaign has been light on policy. So let's bring in NPR White House correspondent Asma Khalid and pharmaceuticals correspondent Sydney Lupkin, who are both here in the studio. Good to have you here.
ASMA KHALID, BYLINE: It's good to be here.
SYDNEY LUPKIN, BYLINE: Yeah.
SHAPIRO: Sydney, will you begin by walking us through the substance of what Biden and Harris announced today?
LUPKIN: Yeah. So the drug price reductions are the result of months of negotiations between drug makers and Medicare. Those kinds of negotiations used to be off limits, but the Inflation Reduction Act, championed by this administration, gave Medicare this new authority. I asked Medicare administrator Chiquita Brooks-LaSure if she ever thought the negotiations would fall apart.
CHIQUITA BROOKS-LASURE: Until it's signed on the dotted line, you know, you always have a chance that things won't work out, but I believe so strongly that the arc of righteousness was on our side.
LUPKIN: And Medicare got some pretty steep discounts. The biggest was a 79% discount for diabetes drug Januvia. Overall, the administration expects drug price negotiations will save Medicare - that is, taxpayers - $6 billion in the first year alone.
SHAPIRO: OK, so significant savings for the Medicare program, but how big a deal is this to seniors on Medicare who take these drugs? Will they notice a difference?
LUPKIN: So they'll mostly notice another number the administration is touting today, which is $1.5 billion. That's how much Medicare beneficiaries are expected to save on out-of-pocket expenses like copays starting in 2026 when these new prices kick in. And that's on top of some other drug price provisions in the Inflation Reduction Act.
The big one beneficiaries will notice, whether they take these drugs or not, is a $2,000 cap on annual prescription drug copays, and that starts in 2025. So it's going to be a big relief for people who are paying, you know, sometimes thousands and thousands of dollar a year out of pocket for their drugs.
SHAPIRO: That's the bottom line on the policy. Let's talk about the politics because, Asma, this is the first official public speaking event where we have seen Harris and Biden together since she took over the campaign that he fought so hard to keep. What was it like?
KHALID: I mean, well, this was the first time that Harris was really center stage as the heir of the Democratic Party. Biden stood to the side at first. And frankly, I mean, Ari, this is just not a dynamic that we've seen before. The crowd was warm and friendly. This was the suburbs of Washington, D.C., Maryland, so we're talking about Democratic turf. But Harris began by making a big effort to pay tribute to the president and to be deferential.
(SOUNDBITE OF ARCHIVED RECORDING)
VICE PRESIDENT KAMALA HARRIS: Few leaders in our nation have done more on so many issues, including to expand access to affordable healthcare, like - than Joe Biden.
(CHEERING)
KHALID: Crowd erupt - at multiple moments, the crowd erupted into cheers of, thank you, Joe Biden. I mean, this really did feel like a campaign event. Biden said that Republicans want to repeal Medicare's power to negotiate drug prices. It's part of what's known as Project 2025. And there was a point where Biden said that the Democrats' Project 2025 is to, quote, "beat the hell out of them."
You know, I was also listening carefully today to how Harris spoke about policy because she has not articulated a whole lot of details about her own agenda. What we saw today is that, really, her candidacy is a continuation of the work she has done with Biden.
SHAPIRO: And how does this issue of prescription drug prices fit into what is now her race against former President Donald Trump?
KHALID: Yeah. Well, I mean, look; this event was not just about the specific policy being rolled out today. It was an attempt to send the message that Democrats broadly want to lower costs. They spoke about going after junk fees, cracking down on surprise medical billing, working to ban the use of medical debt in credit reporting. And this is because voters consistently say that costs and inflation are a big concern for them. Inflation has been cooling, but voters are still frustrated.
And so tomorrow, Harris is giving a speech on her economic vision in North Carolina, where she will call for a federal ban on corporate price gouging, specifically citing the meat industry. She's also expected to talk about tackling housing costs, the expansion of the child tax credit. You know, Republicans are trying to tie her to Biden and his poor approval rating on the economy, but thus far, according to the polls, that does not appear to be working.
SHAPIRO: OK. So with the election, there is a lot of uncertainty about healthcare policy and, really, everything else. But, Sydney, assuming this agreement on drug prices holds, where do Medicare and the pharmaceutical industry go from here?
LUPKIN: Well, the drug industry is still suing the administration in an attempt to stop drug price negotiation, and so far, it obviously hasn't been successful. In the meantime, drug companies have told investors two things - one, that they are managing the expected losses from this process in the short term, but that this will affect which drugs they decide to research and develop going forward.
The nonpartisan Congressional Budget Office did score this part of the law and determined its impact on innovation was modest. Of the 1,300 drugs expected to come to market over the next three decades, only 13 of them wouldn't make it because of the drug price negotiation. Medicare is set to announce the next batch of drugs it will negotiate in February of next year, with negotiations starting in June and wrapping up around Halloween 2025.
SHAPIRO: That is NPR's Sydney Lupkin and Asma Khalid. Good to have you both here. Thank you.
KHALID: Thanks for having us.
LUPKIN: Thank you. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
