President Joe Biden on Thursday was slated to talk up his plan for lowering drug prices and call for congressional action on the issue, even as analysts have sounded downbeat on Washington’s ability to make progress in this area.
Biden wants Congress to allow Medicare to negotiate drug prices, the White House said in a statement released ahead of his speech, which is scheduled to take place around 11:15 a.m. Eastern.
He also wants a penalty for drug companies that raise their prices faster than inflation, along with a “firm cap on the amount that Medicare beneficiaries have to pay out-of-pocket for drugs each year,” the statement said. In addition, he’s expected to speak about 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.
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.
Pharma stocks, as tracked by the Invesco Dynamic Pharmaceuticals ETF
have gained 14% so far this year, while the broad S&P 500 index
is up 18%. Both the pharma ETF and the S&P 500 were trading little changed on Thursday.
From MarketWatch’s archives (July 2020): Trump’s meeting with pharma execs called off, as analysts say his moves on drug prices lack bite