President Joe Biden on Thursday talked up his plan for lowering drug prices and called for congressional action on the issue, even as analysts have sounded downbeat on Washington’s ability to make progress in this area.

“This about whether or not you and your loved ones can afford prescription drugs you need,” he said in a brief speech at the White House. “I look forward to Congress getting this done. This is another area where we can come together and make a difference in people’s lives.”

Biden said he wants Medicare to be allowed to negotiate drug prices. He said he also wants a cap of about $3,000 on the amount that seniors have to pay out-of-pocket for drugs each year.

In addition, the president said drug companies should not be allowed to raise their prices faster than the rate of inflation. His plan features a penalty for companies that hike prices above that rate, the White House said in a statement before his speech.

During his speech, Biden also noted his past moves related to importing lower-cost prescription drugs from Canada and accelerating the development and uptake of generic and biosimilar drugs.

Analysts have said that despite the attention that presidents and many lawmakers have given to drug prices, there likely remain too many stout defenders of pharmaceutical companies in Congress to enact reforms that will cut into overall revenue for the industry.

See: Pharma’s defenders in Congress will blunt drug-price reform, experts say

Talking about drug prices might be “a way to redirect inflation discussion,” suggested Raymond James analyst Chris Meekins in a note to investors ahead of Biden’s speech.

Key steps that Biden talked up Thursday “all require legislation and are already under consideration on the Hill,” said Kim Monk, managing director at Capital Alpha Partners, in an email to MarketWatch.

“This looks more like campaign slogans than a proposal,” she also said. “Nothing new.”

Pharma stocks, as tracked by the Invesco Dynamic Pharmaceuticals ETF
have gained 15% so far this year, while the broad S&P 500 index

is up 19%. The pharma ETF was trading 1% higher on Thursday, as the S&P 500 added 0.2%.

From MarketWatch’s archives (July 2020): Trump’s meeting with pharma execs called off, as analysts say his moves on drug prices lack bite

Also (December 2019): Pelosi’s drug-pricing bill passes House, but pharma stocks are up as it’s unlikely to become law

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Latest News