BIDEN: CUT MORE DRUG PRICES — President Joe Biden made an assertive bid in his State of the Union address Thursday to expand his administration’s policies to lower drug prices. “Americans pay more for prescription drugs than anywhere else in the world,” he said. “It’s wrong, and I’m ending it.” The speech offers a vision of how Biden plans to govern if he were to secure a second term, with an expansion of policies in the 2022 Inflation Reduction Act as a key focal point. Here’s what the president proposed: Expand drug price negotiations: Biden seeks to dramatically increase the number of drugs subject to Medicare price negotiations to 50 a year, up from 20. CMS is negotiating with the makers of 10 drugs, with the final prices set to be announced by Sept. 1 and go into effect in 2026. Without a change, the number of eligible drugs will increase to 15 in 2027 and 2028 and to 20 every year thereafter. “They’re making a lot of money, guys, and they’ll still be extremely profitable,” Biden said of the drug industry. He added that the expansion would save taxpayers another $200 billion over the next decade. Extend the prescription drug cost cap: Starting next year, older Americans on the Medicare prescription drug program would pay no more than $2,000 out of pocket. Biden seeks to expand that cap to those on commercial plans, too. It remains unclear how such an expansion would work, as insurers would have to cover any costs over the cap. Expand the insulin cap: Biden once again called for the IRA’s $35 monthly co-pay cap for Medicare beneficiaries to be extended to those on private plans. This idea has gotten bipartisan support in the Senate but has yet to gain traction in either chamber. BUT DRUGMAKER LITIGATION CONTINUES — Meanwhile, a crucial hearing in a courtroom in Trenton, New Jersey, took place hours before the State of the Union address. The hearing was about drugmakers’ ongoing legal efforts to halt the price negotiations. Outside counsel for Bristol Myers Squibb, Janssen, Novartis and Novo Nordisk and Department of Justice attorneys made their case at the U.S. District Court for the District of New Jersey. The unusual setup — the companies each have their own lawsuit, persuaded a district court judge to consolidate oral arguments into one hearing since the arguments in the suits overlap. It offers the most comprehensive opportunity to date for a federal judge to opine on the industry’s various constitutional and statutory challenges to the IRA’s drug pricing provisions. The four lawsuits argue the negotiations program violates the First, Fifth and Eighth amendments, as well as the nondelegation doctrine and the law governing administrative procedures the government must follow when writing regulations. Judge Zahid Quraishi, a Biden appointee, signaled some skepticism of the drugmakers’ claims that agreeing to the government’s final price offer would harm drug research investment, quipping that pharma companies are not “Mother Teresas” developing drugs for free. But he prodded both sides to defend their positions for and against the program in a nearly four-and-a-half-hour day that the judge said went well beyond the parties’ briefs. Oral arguments are “often redundant” and “a waste of time,” Quraishi said. “Absolutely, that was not the case today.” It’s unclear when the judge will issue his decision. The next deadline in the negotiations process is Sept. 1, when both sides will agree to the final prices. IT’S FRIDAY. WELCOME BACK TO PRESCRIPTION PULSE. ICYMI: The government’s program to provide free at-home Covid-19 tests through USPS will be suspended today. Send news and tips to Lauren Gardner (lgardner@politico.com or @Gardner_LM) or David Lim (dlim@politico.com or @davidalim).
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