Sec. 1 Policy
On July 9, 2021, I signed Executive Order 14036 (Promoting Competition in the American Economy), which directed various actions in pursuit of my Administration's policy to improve competition, increase wages, and reduce prices for prescription drugs, among other goods and services. In response to Executive Order 14036, the Department of Health and Human Services (HHS) submitted a report to the White House Competition Council calling for bold legislative and administrative actions to lower drug prices.
On August 16, 2022, I signed Public Law 117-169, commonly referred to as the Inflation Reduction Act of 2022 (IRA), which will lower the cost of prescription drugs and save millions of Americans hundreds or thousands of dollars per year. The IRA will protect Medicare beneficiaries from catastrophic drug costs by phasing in a cap for out-of-pocket costs at the pharmacy and establishing a $35 monthly cap per prescription for insulin covered by a Medicare prescription drug plan and insulin delivered through traditional pumps. Starting this January, Medicare beneficiaries with prescription drug coverage will pay $0 out of pocket for recommended adult vaccines (including the shingles vaccine). The IRA will also require certain companies to pay Medicare rebates if they increase the prices of drugs used by Medicare beneficiaries faster than the rate of inflation. In addition, the Secretary of HHS (Secretary) will be able to negotiate prices for selected high-cost prescription drugs for Medicare beneficiaries for the first time ever. Following the passage of the IRA, HHS has taken critical steps to swiftly implement these historic provisions in order to deliver results and lower health care costs for the American people.
As my Administration works to implement the IRA, it is critical that we take additional actions to complement the IRA and further drive down prescription drug costs. Within HHS, the Center for Medicare and Medicaid Innovation (“Innovation Center”) tests health care payment and delivery models to improve health care quality and make the delivery of health care more efficient. In June 2022, the Innovation Center announced a new model to improve cancer care and lower health care costs for cancer patients, including prescription drug costs. The Innovation Center provides my Administration and the American people with a useful set of tools to help lower health care costs and improve quality of care, and its work can advance the continued policy of my Administration to lower the cost of prescription drugs.