Biden Government issues an order to cater to higher medicine prices for Americans

A new executive order was issued by the President of the US, Joe Biden to develop new ideas for payment and delivery of medication to reduce the cost of medication in the long run.

As per the orders issued, the Department of Health and Human Services will have to make a report to evaluate ways to increase access to newly developed medications, and a special concession for those enrolled in Medicaid or Medicare. Along with this, the different mediums of payments will also be explained. The order issued by the President does not give any new powers to DHHS but focuses on reducing the cost of medication along with future administrative ideas and their successful execution. Within a period of 3 months, the HHS officials will have to submit a report to the U.S. department of domestic policy, highlighting the new developments if any, and their future timeline and testing plan.

The statement in the order was:

“A high percentage of Americans are unable to have access to the medication prescribed to them. Roughly 25% of Americans are unable to pay for the prescribed medication due to higher costs. According to the research, the prices of medicines in America are three times higher than the prices in other countries. The people of America have to cut their doses in half due to higher prices leading to affordability issues”.

Since 2014, drug prices have increased by 35%, as compared to the cost of other items and services which increased by 19%.

Models that can be examined under the Center for Medicare and Medicaid Innovation are covered under the order. In some of its models, the institute has been attempting to include medication price reform. For instance, in June, CMMI released the Enhancing Oncology Model, which aims to direct oncology practices toward more high-value therapies rather than only the priciest medicines.

The center is working on the development of new requirements in their policy to cater to the gaps in health equality, including a new requirement under the ACO REACH model for participants to create an equity strategy, which is driving the push to consider the pricing of drugs at CMMI. Another top health priority for the Biden administration is increasing health fairness.

The order has come at a time when the administration is putting the Inflation Reduction Act’s medication price measures into effect. Beginning in 2026, the newly made law gives Medicare a special authority to bargain for lower rates on selected groups of Part B and D medications.

Earlier this month, a limit has been set by the CMS on the additional expense of prescribed medicine prices to ensure that the prices increase is in line with the inflation rate and not higher. This focuses on the potential effects of the inflation and cost gap. As per the historic data released by the HHS, 1190 items had price increase that was above the current inflation rate. A $35 cap on monthly insulin expenditures for Medicare users is another provision of the Inflation Reduction Act.