MARY LOUISE KELLY, HOST:
Today, the Biden administration announced the next batch of prescription drugs - 15 of them - that will be included in price negotiations with pharmaceutical companies. The goal is to lower costs for people covered by Medicare. That is the federal health insurance program for people aged 65 and older. It also covers some younger people with disabilities.
Now, the list announced today includes some really popular drugs - things like the anti-obesity medication Wegovy. Bottom line, the changes could save Medicare and taxpayers billions of dollars, but only once they go into effect two years from now - so January 2027. Joining me now, Health and Human Services Secretary Xavier Becerra. Secretary Becerra, welcome back to ALL THINGS CONSIDERED.
XAVIER BECERRA: Thanks, Mary Louise.
KELLY: So I mentioned Wegovy. Give us a couple more of the most important drugs included in this round of negotiations. And why these drugs?
BECERRA: Well, Wegovy and Otezla - everyone recognizes those two; Ozempic - another drug that might be familiar to some; Xtandi - another drug that's extremely expensive that's been around for a while; a number of drugs that treat cancer, cardiovascular disease, stroke, renal disease - it's a type of illness that usually requires expensive medications. These are drugs that, in a given year, will cost Medicare somewhere around $40 billion - just these 15. And remember, Medicare provides access to about 8,000 drugs.
KELLY: Now, I do have a question or two about timing because you - the outgoing Biden administration - you've picked these 15 drugs, but you're about to leave office. So do I understand correctly the actual price negotiations with the drug companies - that's going to happen under the incoming Trump administration?
BECERRA: That's right. The drug companies have until February 28 to decide if they want to actually engage in the negotiations.
KELLY: Why not leave this decision of which drugs, then, to the incoming administration?
BECERRA: Well, it's pretty programmatic. There's a roadmap for which drugs can be on the list, just as the last year's 10 drugs were based on the criteria that Congress put before us in the Inflation Reduction Act. The same applies to these 15, so it's pretty formulaic. And because we did it last year, we were ready.
KELLY: Although, the deadline to select this batch of drugs - it wasn't for another couple of weeks - right? - the first of February?
BECERRA: February 1 was the deadline to get, yeah, the drugs announced.
KELLY: Ah. So as we've noted to, this is the second batch of drugs that the Biden administration has targeted for negotiation under Medicare. How much money will the government save from that first batch?
BECERRA: Well, from that first batch, out of pocket, the millions of Americans who are part of Medicare will save in their - from their own pockets - about a billion and a half dollars in a year. On top of that, taxpayers - and by the way, those beneficiaries are also taxpayers - but taxpayers, because the Medicare program subsidizes the cost of those prescription drugs and pays the bulk of it, saves about 6 billion. So add the billion and a half and the 6 billion, and you can see the savings in one year that will be had from having negotiated lower prices - prices that were about 40- to 80% lower than what they were listed at.
KELLY: So a huge price drop in some cases - although some of these drugs will still cost hundreds of dollars out of pocket, correct?
BECERRA: Not only will they cost a lot of money still - but it was great that we negotiated - but compared to what others around the world pay, we are still paying too much, even after this negotiation.
KELLY: Yeah. Since you nodded to what others around the world pay, I am curious. This is a bigger-picture question - but why do you have to do this in such small batches - 10 drugs here, 15 there. Why not negotiate everything the way they do in Europe?
BECERRA: Yeah, great question. One, Congress prescribed it this way - said you're going to do 10 drugs the first year, 15 the next year, and so forth. And two, just capacity - to try to do negotiations on 8,000 drugs when we've never done negotiations before, it would have been a hill too high to climb. We wanted to do it right. We did it right last year. We proved that we will save money - more, in fact, than was expected even by the Congressional Budget Office, which is the fiscal scorekeeper for Congress. And so if we do it right, we'll get major savings, and that's what you want to do. And so the good thing is that, between the first 10 drugs last year that we negotiated and these 15 drugs, that's a third of all the money that's spent on prescription medication within the Medicare program, even though there aren't just 15 - excuse me, 25 - drugs in the program. There are probably close to 8,000.
KELLY: Secretary Becerra, this must be one of your last interviews as Health and Human Services secretary.
BECERRA: As secretary, yes.
KELLY: Yeah. And President-elect Trump has picked Robert F. Kennedy Jr. as your successor. If he is confirmed by the Senate, are you confident he will carry on this work - negotiating drug price reductions on these specific drugs and this plan?
BECERRA: Well, I won't comment or speculate on the next secretary, but what I will tell you is there is a core of personnel at HHS, regardless of administration, that has done dramatically important work for the American people. They are here. Those experts, those scientists, those doctors, those professionals will make sure that we leave America healthier and stronger than the previous administration. That's, I think, the hope for the next four years. I can certainly say with confidence that we have left America stronger and healthier than when we found it four years ago.
KELLY: I'll broaden the question - are you confident that Robert F. Kennedy Jr. will carry on the broader work you've done, beyond negotiating drug price reductions?
BECERRA: Well, failure's not an option when it comes to the health of the American people and our economy. And so we need to make sure we have a team at HHS working with the next president who will get things done. The most important thing I can tell any secretary coming in - the piece of advice - execute. Because you're going to have a massive portfolio. You got a lot of things to do. You get a lot of money to do them. Execute.
KELLY: Xavier Becerra - he is, for three more days, the secretary of Health and Human Services. Good to speak with you. Thank you.
BECERRA: Thank you.
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