On-the-Record Press Call on the Biden Administration’s New Actions to Lower Healthcare Costs for Americans

Via Teleconference

4:47 P.M. EDT

MR. MUNOZ:  Hi, everybody.  This Kevin Munoz.  Thank you for joining us for our call previewing the President’s event tomorrow in Nevada, as well as new actions that the Biden administration is taking to lower healthcare costs for Americans.

As a reminder, this call will be on the record and embargoed until tomorrow at 5:00 a.m. Eastern.  You all should have received some materials that are also embargoed.

On today’s call, we will have Susan Rice, the White House Domestic Policy Advisor; Secretary Xavier Becerra, the Secretary of Health and Human Services; and Administrator Chiquita Brooks-LaSure of CMS.  We also have a few representatives from HHS, CMS, and the White House Domestic Policy Council on for Q&A.

But, with that, I will kick it to you, Susan. 

One second, I think we have some technical difficulties. 

AMBASSADOR RICE:  Kevin? 

MR. MUNOZ:  Yes, hi.  We can hear you now.  Hi, Susan. 

AMBASSADOR RICE:  Okay.  Sorry about that everybody.  And thank you very much for joining us. 

Americans pay two to three times more for prescription drugs than citizens in other developed countries.  And that’s why, since day one, President Biden has been committed to lowering healthcare costs and expanding benefits for all Americans.  And he has done just that with the Inflation Reduction Act.

First, the law makes many recommended vaccines free for Medicare beneficiaries.  And tomorrow, the Biden-Harris administration is going to release new data showing how President Biden’s prescription drug law is saving money for seniors across the country.

A new report finds that 3.4 million people with Medicare would have saved an average of nearly $70 per person in 2021 had the Inflation Reduction Act already been in effect.  That’s over $230 million in savings on recommended vaccines, like the shingles and tetanus vaccines.

We expect that in 2023 and beyond, even more people with Medicare will benefit from this provision, and vaccine uptake will be higher because the lower out-of-pocket costs will encourage folks to get these important vaccines.

Next, under the Inflation Reduction Act, for the first time, Medicare will negotiate lower prescription drug prices for seniors.  Medicare will announce the first 10 drugs selected for negotiation in September.  But tomorrow, the Department of Health and Human Services will release initial guidance on how its prescription drug process — negotiation process will work.

Furthermore, the Inflation Reduction Act requires prescription drug companies to pay rebates to Medicare if they raise their prices faster than inflation, as was the case with 1,200 prescription drugs last year alone.

Starting April 1st, Medicare beneficiaries will pay lower coinsurance for Part B drugs that raise prices faster than inflation.  And tomorrow, HHS will publish its first list of drugs for which this provision will apply.

All of this builds on our work as well to lower insulin costs.  As you know, insulin costs less than $10 a vial to make, but some Americans pay over $300 for it, and that’s flat-out wrong.

President Biden called on pharma companies, for that very reason, to bring prices down for insulin on their own.  And we’ve seen two major manufacturers heeding that call.  Just today, Novo Nordisk announced its plans to cut the price of insulin by 75 percent.  Congress should finish the job and extend the $35 insulin cap to all Americans.

But we know that congressional Republicans have a very different plan, one that would be bad for Americans’ health as well as their pocketbooks.

Congressional Republicans have introduced legislation to repeal the Inflation Reduction Act.  That means millions of Americans would pay higher health insurance premiums and higher taxes, millions of Americans would pay higher drug prices and insulin prices, and millions of seniors would be unable to get recommended vaccines for free, and billions of dollars would go back into the pockets of Big Pharma, all while increasing the deficit. 

I’m very proud of the work we’ve done to lower costs for Americans and improve their access to important treatments and preventative care.  We’ve got to do more work to finish the job. And millions of Americans are relying on that — on us to do just that.

So, with that, I’ll turn it over to Secretary Becerra.  And thank you.

SECRETARY BECERRA:  Ambassador, thanks very much.  Kevin, thank you.  And to Administrator Chiquita Brooks-LaSure, thanks for all the work that she and her team — some of whom are on and may be answering questions — will be available.

I just wanted to say to everyone who is on this call: Thanks for joining and thinking it important enough to report about. 

Thanks to the President’s new lower cost prescription drug law, people who get their insulin through Medicare won’t have to pay more than $35 a month for that month’s supply, as you heard from Ambassador Rice.  For the first time ever, we’re going to now be able to begin the historic process of negotiating to get lower, competitive prescription drug prices.

We’re taking on powerful interests to bring down healthcare costs so Americans can sleep better at night. 

And on top of this, we are breaking record after record on the Affordable Care Act health insurance enrollment.  Today, the number is some 16.3 million Americans who have chosen a quality, affordable health plan by the end of this year when the open enrollment closed.

Compare that to just two years ago when the President took office, when there were about 11.1 million Americans enrolled in the Affordable Health Care plans.

But today, I want to talk about three things we’re doing right now in Medicare: making vaccines free, reducing cost of insulin, and rebates that lower costs for the Medicare program for people who are on Medicare.

Today, HHS is releasing a report that shows the savings people with Medicare will see now that the out-of-pocket costs for recommended preventative vaccines covered under Medicare Part D have been eliminated. 

The report will show — when you have a chance to read it — that about three-and-a-half million people — about 3.4 million people, or about 7 percent of the folks on Medicare Part D, will receive a Part D covered vac- — who received a cover [COVID] vaccine in 2021.  Well, those folks, they paid about $234 million in out-of-pocket costs for those vaccines back in 2021.

Today, they would pay zero dollars as a result of the President’s new lower prescription drug law. 

The report also shows that in some cases, some people paid nearly $200 for the shingles vaccine by itself.  Again, not anymore.

And, by the way, one in three Americans will get shingles at some point in their life.  It’s something people really want to avoid.  I think we all know that.

But think about that: Three and a half million people paid $234 million out of their own pocket back in 2021 for vaccines.  No longer.  That’s $234 million that people would now have in their pockets as a result of this new prescription drug law that the President made possible.

The report also examined the number of enrollees who receive vaccines covered under Part D, their total out-of-pocket spending, and average out-of-pocket spending for each state.  The report has a full breakdown. 

Let me just highlight a few of the states.  My state, California: 403,000 Californians received vaccines under Part D in 2021.  In 2021, about 227,000 Floridians received vaccines under Part D in 2021.  And in Texas, there were some 204,000 Texans who received vaccines under Part D. 

All of them paid something for those vaccines.  All of them today would not have to pay anything for those vaccines. 

By the way, the highest average out-of-pocket costs were for folks in the states of South Dakota, about $142 in out-of-pocket costs; Wyoming, about $129; and North Dakota, about $127. 

Again, all those South Dakotans, folks from Wyoming, folks from North Dakota — those are dollars they would now have still in their pocket now in 2023. 

And again, that’s just for one year.  That was just 2021.  Now, moving forward — 2023, 2024 — moving forward, zero dollars out-of-pocket cost. 

Let me turn real quickly to insulin.  No one should have to skip or ration their insulin because they can’t afford it.  Thanks to the President’s new lower-cost prescription drug law, they won’t.  And people on Medicare won’t be on the hook when drug companies inexplicably jack up the prices of their drugs. 

In addition to the $35 insulin cap, drug manufacturers will now need to pay rebates to Medicare if their prices increase for certain drugs beyond inflation. 

In January, we released a report showing that the $35 monthly insulin cap would have saved about a million and a half people with Medicare an average of about $500 on their insulin back in 2020.  Again, that’s one year, back in 2020.

The highest average annual out-of-pocket savings per person benefiting from the new insulin law — North Dakota, with about $805, would have been saved by individual net savings; Iowa, about $725 would have been saved by folks in Iowa; and South Dakota, $725 as well. 

These kinds of savings will give people a little bit more breathing room, more comfort as they decide to go to the grocery store to buy their food, more ability to pay their rent, or maybe it’s just to do something decent for their grandkids. 

Lastly, I want to address the Medicare Part B coinsurance provisions in the Inflation Reduction Act.  The IRA requires drug companies that raise prices for certain drugs faster than the rate of inflation to pay a Medicare rebate. 

Administrator Brooks-LaSure will share more of the details with you today about these rebates and about how some people with traditional Medicare or managed care Medicare may stand to save starting in a matter of — just a matter of weeks. 

This list of drugs that are included will be updated every quarter from here on out when it comes to those rebates. 

The President’s budget capped — caps the price of insulin at $35 for everyone and negotiates a fair price for more prescription drugs.  That’s going to be good news for Americans.  It will make certain generic drugs available for Medicare beneficiaries for a $2 co-pay.  It brings peace of mind to millions of Americans. 

The President’s budget will strengthen Medicare for the next generation. 

All of these things are good for the people of America with Medicare.  And this is good for the future of Medicare as it looks to serve all beneficiaries moving forward into the future.  And that’s, of course, good for all American taxpayers. 

Let’s hope every Medicare beneficiary takes advantage of all these savings.  Let’s hope every American can share in those savings. 

And now, I think I’m turning this over to Administrator Chiquita Brooks-LaSure with CMS. 

ADMINISTRATOR BROOKS-LASURE:  Thank you so much, Secretary Becerra.  It is a pleasure to join you and Ambassador Rice today.  And thank you again to all of — all of you who joined us.

Under the leadership of President Biden and Vice President Harris, this administration is ensuring the American economy works for everyone, which includes being able to keep you and your family healthy.

Last week, the President proposed a budget that will ensure that Medicare is here for our children’s children, as certified by our own CMS chief actuary.

At CMS, we’re fighting every day to make sure that all people have a just opportunity to obtain their optimal health.

One of the most important ways we can protect people’s health is to ensure they can afford the prescription drugs they need by reducing the cost of drugs. 

Thanks to the actions of the Biden-Harris administration and the President’s new prescription drug law, called the Inflation Reduction Act, we’re tackling the cost of prescription drugs and delivering lower drug costs to millions of people and families across the United States.

The new prescription drug law is already helping people with Medicare save money through free recommended vaccines and caps on insulin costs for people with Medicare prescription drug coverage.

The new law requires drug companies to pay rebates to Medicare for increasing drug prices faster than inflation.

Beginning October 1st of last year, those rebates went into effect for drugs that you get from your pharmacy under Medicare prescription drug coverage.

Today, we’re talking about lowering costs on drugs you get at your doctor’s office.

On January 1st of this year, rebates for drugs administered by physicians under Medicare Part B went into effect.

For both rebates, CMS will send invoices to drug companies by the end of 2025.

As part of the Part B rebate provision, beginning this April, some people with Medicare may pay less for certain drugs.

CMS is delivering these savings to the people we serve right on schedule, with tomorrow’s release of the April 2023 Average Sales Price File.  This file includes a list of drugs that may be cheaper for some people with Medicare as a result of the new drug law.

In the first quarter with this lower cost sharing, some people may see savings for 27 drugs listed in the file.

The Medicare Prescription Drug Inflation Rebate Program is strengthening Medicare by making prescription drugs affordable for millions of people and discouraging drug companies from increasing prices faster than inflation.  It’s also protecting Medicare for our children and grandchildren.

President Biden, Vice President Harris, and those of us who serve in their administration are working to protect our country’s most precious resource: our health. 

Thank you. 

And now I’m turning it back over to you, Kevin.

MR. MUNOZ:  Thank you, Administrator.  We have time for a few questions.  Let’s go to Rachel Roubein with the Post. 

Q    Hi, my question was: Could you explain what the note from the CMS actuary is essentially saying?  Is it saying that the actuary believes that Biden’s Medicare financing plan, if it went into effect in fiscal year 2024 — so, essentially, if Congress passed it — then the Medicare trust fund would be extended for another four years?

ADMINISTRATOR BROOKS-LASURE:  This is the CMS Administrator.  If the President’s budget — all of the proposals were put into place, it would be — the trust funds would go to 2050.  But the — but the — yes, if the President’s budget baseline is th- — is now 2032.

So that’s an update to the trustees analysis that was done last year, now that we — during the President’s budget, the actuaries update the baseline, and it’s based on what our current wealth projections are.

MS. LINKE YOUNG:  And just to underscore the Administrator’s point, the conclusion of the actuary is that implementation — congressional enactment of the President’s budget would extend the Medicare trust fund solvency date for another generation, for more than 25 years, into 2050 and beyond.

MR. MUNOZ:  And just to help, that was Christen Linke Young with the Domestic Policy Council.

Let’s go to Amanda Seitz at the Associated Press.

Q    Hi, thank you.  I was curious if you could just go over the drug rebates.  Are you essentially saying that you think the drug companies will lower the costs in anticipation that they’re going over that inflation rate since you’re not billing them until 2025?

ADMINISTRATOR BROOKS-LASURE:  This is the CMS Administrator.  I’ll start and then allow others to chime in as they like.  So, what we’re saying, kind of, is a couple-fold. 

What we’re releasing now are the companies that did, in fact, go over inflation.  So they increased their drugs at a rate faster than inflation.  And so, for the 27 drugs that we’ve listed, cost-sharing for those drugs will go down.  And those are the amounts that we’re releasing.

We do believe that the inflation rebate proposal, the overall provision, does give a strong incentive for drug companies to not increase their prices above inflation. 

So, it’s sort of, I would say, a two-fold benefit.  One, that if drug companies do exceed inflation, they will be paying rebates to the federal government.  And for Part B drugs, they will lower cost-sharing for Americans to get Part B coverage. 

But even as important, I would say, is the incentive for drug companies not to increase cost.  And that’s something we’ve seen in the Medicare — excuse me, the Medicaid inflation rebate, and now this is an even stronger tool.  

And would add out: If Christen or Meena has anything they’d like to add, please do.

MS. LINKE YOUNG:  No, I think you covered it.

MR. MUNOZ:  All right, Tammy at CNN. 

Q    Hi, thank you for taking my call.  So, I just also wanted to get a little bit more clarity on what is the mechanism that will actually provide the rebate to the seniors starting in April as opposed to the end of 2025.

MS. LINKE YOUNG:  So I can I can start.  This is Christen from the White House.  So, the provision has two parts.  One component is that manufacturers will owe a rebate to CMS and will be invoiced in — you know, in the future, as the Administrator alluded to. 

But separate from that invoicing, Medicare will be reducing its Part B cost-sharing for these drugs this coming quarter.  And Medicare Advantage plans are also required to not exceed the level of cost-sharing that’s provided here. 

And so, if you are a patient taking one of these — these drugs, the Part B cost-sharing will be reduced below the 20 percent that Part B cost-sharing typically is to account for the differences noted in the file. 

As the Administrator noted, the sort of exact incidence of that will depend on what supplemental coverage you may have, but Medicare Part B cost-sharing will be directly reduced for these drugs, because the drug’s price increased faster than inflation.

MR. MUNOZ:  Great, thanks. 

Let’s go to David Lim at Politico.

Q    Hi, thanks for taking my question.  With regard to the Part B rebates, I know you guys estimate the number that seniors might see their out-of-pocket costs decrease over time per dose.  But do you guys have any estimates for the total number of funds that seniors may end up not paying as a result of these drugs through the next quarter and through the end of the year?

DR. SESHAMANI:  This is Dr. Seshamani with the —

MS. LINKE YOUNG:  This is Christen —

DR. SESHAMANI:  Oh, Christen, you want to take it?

MS. YOUNG:  Go ahead, Meena.  Go ahead.

DR. SESHAMANI:  This is Meena Seshamani.  I’m Director for the Center for Medicare. 

So, the amount that any individual person would see depends on a few things.  As the Administrator mentioned, it depends on what kind of supplemental coverage they have.  Because if they have wraparound coverage that is taking care of their out-of-pocket costs, then that will absorb, you know, some or all of it. 

It also depends on the dose and the treatment protocol that they’re on.  Because depending on the dose of the medicine that they take, that impacts what their out-of-pocket costs are. 

So, because of those complexities, it’s hard for us to be able to say that there is exactly this much money, you know, for people to be able to come up with that full estimate because there are these variables in play. 

However, overall, this provision — both because of the impact that it will have on the market to discourage manufacturers from increasing prices faster than inflation and because of this provision to lower the out-of-pocket costs in Part B for that coinsurance, this provision really does protect people with Medicare from large out-of-pocket price increases for certain Part B drugs.

MR. MUNOZ:  Okay.  We have time for one more question.  Let’s get a Rachel Cohrs at STAT News.

Q    Thanks.  I just wanted to ask whether we would get any details about the negotiation guidance.  Maybe I just missed something but I don’t — I didn’t see it in the embargoed materials.  So just wanted to check whether I’m missing something or whether that’s something we will get later.

MS. LINKE YOUNG:  This is Christen.  You are not missing something.  The negotiation guidance will be released tomorrow, and we don’t have any details to preview at this time.

MR. MUNOZ:  All right.  Thank you everybody for joining. 

As a reminder, everything is embargoed till 5:00 a.m. tomorrow.  Don’t hesitate to reach out if you have any questions. 

Have a good day.

5:12 P.M. EDT