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Biden to call for expanding Medicare drug negotiation program

U.S. President Biden hosts event on health care costs, Medicare and Social Security at the White House to Washington

By Ahmed Aboulenein

WASHINGTON (Reuters) - President Joe Biden will call on Congress to expand the number of drugs subject to annual Medicare price negotiations in his State of the Union address on Thursday, the White House said.

The negotiation program, passed as part of 2022's Inflation Reduction Act, empowers Medicare to use its vast size to bargain with pharmaceutical companies to lower prices of expensive drugs for Medicare participants, who are age 65 and older.

The program currently foresees adding 10 to 20 drugs a year through 2029, and Biden will propose increasing this to 50, White House domestic policy adviser Neera Tanden told reporters on a media call on Wednesday.

"Medicare should not be limited to negotiating just 10 drugs a year or 20 drugs a year. That is why the president will propose that Medicare should be able to negotiate prices for at least 50 drugs per year," Tanden said.

Negotiations for the first 10 drugs in the program began last month with price changes set to take effect in 2026. Under the law that number grows by 15 per year in 2027 and 2028 then by 20 a year starting 2029.

Biden made a similar call last year but Congress did not take it up. Any amendment of the Inflation Reduction Act, which passed without a single Republican vote, would need approval from a divided Congress.

Drugmakers and industry groups have filed lawsuits challenging the program on several grounds, including claims that it takes away their property rights without due process, in violation of the U.S. Constitution, with courts upholding the law three times so far.

Biden has made lowering healthcare costs a key part of his 2024 reelection campaign and will call on Congress in his Thursday speech to expand other healthcare benefits outlined in the Inflation Reduction Act, the White House said.

He is proposing that a $2,000 cap on out-of-pocket prescription drug costs in Medicare, set to start in 2025, be expanded to include all private insurance, and that the law's requirement that pharmaceutical companies pay rebates to Medicare when they increase drug prices faster than inflation apply to commercial drug sales as well.

Biden will also call on Congress to cap out-of-pocket costs for common generic drugs at $2 for people on Medicare.

(Reporting by Ahmed Aboulenein; Editing by Cynthia Osterman)