Neera Tanden talks about how the Biden administration's price drug cuts will work

MARY LOUISE KELLY, HOST:

Prices for prescription drugs here in the U.S. are way higher than in other countries. Today we have learned which 10 drugs the Biden administration wants to make more affordable for those on Medicare. They include medications for blood clots, diabetes, heart conditions, arthritis. Well, the push to rein in prescription drug costs is something a lot of us have tracked or waited on for years. Some experts tell NPR this is the first-round bell of what is expected to be a heavyweight battle between the government and drugmakers. Well, let's talk it through with Neera Tanden, domestic policy advisor to President Biden. We've reached her at the White House to ask, why prioritize these drugs?

NEERA TANDEN: Well, the most important issue here is that this is the first 10 drugs. The Inflation Reduction Act specifies that we are negotiating these first 10 drugs this year, and then next year, there will be an additional 15 drugs, after that, 15 drugs and then 20 drugs a year. So the Inflation Reduction Act itself - the statutes specify the requirements of what makes the list. And it's really focused on the highest expenditures by Medicare.

KELLY: So you're hoping this is the beginning of a list that will get longer. Got it.

TANDEN: Oh, we know it's the beginning. It's definitely (laughter) the beginning.

KELLY: Well, let me put to you some of the challenges out there. One, the pharmaceutical industry contends that these type price negotiations will chill innovation, will ultimately hurt patient access to new medications. How do you respond to that?

TANDEN: This has been a well-studied issue. The Congressional Budget Office did a real deep dive into this particular question. And they determined that the Inflation Reduction Act Medicare negotiation would only affect, would limit one drug out of thousands in the next 10 years and just a handful of drugs over the next 30 years. So this argument about innovation - we consider it a false argument because...

KELLY: Well, and I hear you saying it's been studied, but if drugmakers who, as the name suggests, are the people making the drugs - if they say this is going to chill innovation, you're entirely confident that that's not the case?

TANDEN: Yes because they're able to manage with lower drug costs in every other country in the world. And so there is plenty of investment that they can make. And what we're really saying is that it is wrong for Americans to pay two to three times more in America than they - than these same drug companies for the same drugs charge in other countries.

KELLY: Just practically speaking, as you know, lawsuits have already been filed around the country to stop price negotiations like this. Pharmaceutical companies are calling these provisions unconstitutional. Is there a real possibility these price cuts may not actually come to pass?

TANDEN: Well, first of all, Medicare has the ability to negotiate and does negotiate. And it has negotiated for decades every other aspect of the health care system. The only reason why Medicare has not been negotiating drug prices is because there was a prohibition in the law, a sweetheart deal that, really, the pharmaceutical companies got decades ago. Inflation Reduction Act ended that. There is absolutely nothing in the Constitution that prohibits Medicare from negotiating drug prices.

KELLY: So to people who may be thinking about - you know, something totally different but, say, student debt relief, which the administration argued would happen and was constitutional, that plan was struck down by the Supreme Court. You're quite sure that drug price negotiations won't wind up in a similar situation?

TANDEN: So the argument that the court used against student debt relief, an argument we think is wrong - that argument was that the student debt relief was a major question for Congress. This is a major question that has been answered by Congress by passing the Inflation Reduction Act.

KELLY: On the timing, whatever price drops do result from these negotiations, my understanding is they will not happen before 2026. That's obviously after the 2024 election. How do you get voters to give the president credit for this when they go to the polls?

TANDEN: The Inflation Reduction Act is already producing lower costs for Americans - $35 insulin for seniors is a product of the Inflation Reduction Act. We've also lowered health care costs for 15 million Americans by $800. And these drug prices will be public in September of 2024. People will see these prices are down. These are subject to negotiation. But they will be implemented in 2026, but people will know that these prices are coming in the fall of 2024.

KELLY: Neera Tanden on the line from the White House, where she is domestic policy adviser. Thanks so much.

TANDEN: Thank you. Transcript provided by NPR, Copyright NPR.