STEVE INSKEEP, HOST:
President Biden campaigns today with Vice President Harris. She is expected to make some economic promises. And they both may promote an announcement from the Biden administration about drug prices. The Inflation Reduction Act passed by Congress a couple of years ago gave the United States the power to negotiate drug prices for Medicare. Overnight, the administration claimed some success, cutting prices on 10 common medications, according to these negotiations. Secretary of Health and Human Services Xavier Becerra is in the middle of all this and he's on the line. Good morning, sir.
XAVIER BECERRA: Steve, great to be with you.
INSKEEP: Thanks for joining us again. So you have announced $6 billion in savings on 10 common drugs. A couple of big numbers, but what do they mean?
BECERRA: So these are the 10 most expensive drugs in the Medicare program. There are about 3,500 or more drugs that the Medicare program covers. These are the ones that cost us the most. And the $6 billion represents what the program would save over one year as a result of these prices. If these prices had been in effect in 2023, the program - taxpayers and Medicare beneficiaries would have saved $6 billion. By the way, on top of those $6 billion, another $1.5 billion would have been saved by the actual Medicare beneficiaries. There are about 9 million beneficiaries in Medicare who use these 10 drugs, and they would have saved money 'cause they have to put money out of their own pocket to cover the additional cost of these drugs beyond what Medicare pays.
INSKEEP: You're helping me out a little bit here, because first we should note these are drugs that - they're blood thinners, they're a lot of different common medications. I'm wondering, who saves the money here? Because the federal government, of course, pays for Medicare. But there are premiums for Medicare Part D. There are copays. You're telling me that about three-quarters of the savings go to the taxpayers but that an ordinary consumer, a senior citizen, a person on Medicare, would see some savings. Is that what you're telling me?
BECERRA: Yeah, yeah. Well, and it's more than three-quarters because, remember, 6 billion by itself goes in savings to the Medicare program because Medicare pays the bulk of the price of each drug that a Medicare beneficiary has to use. But sometimes there are copays, coinsurance, so Medicare recipients will oftentimes have to fork out of pocket quite a bit of money. If you've got cancer, a cancer drug, you could be paying several thousands of dollars for your prescription medication above and beyond what Medicare covers for you. So there will be savings both for all of us who care about the Medicare program as taxpayers, as beneficiaries. But specifically beneficiaries, on top of that, our estimate is about $1.5 billion will go to those 9 million or so Medicare beneficiaries who use these 10 very critical drugs.
INSKEEP: So I want to understand the effects of this. The drug companies, of course, sell medication to everybody. The federal government is a gigantic customer. There are other customers. Do you expect that drug companies are going to get their money back elsewhere, raise costs on somebody else?
BECERRA: Well, I think they already get their money back. You know, this is just what happens when you negotiate. Negotiating is as American as apple pie. You don't go into a car dealership and just pay sticker price. Well, that's what by law we were having to do for the 66 million people on the Medicare program, is...
INSKEEP: Yeah.
BECERRA: ...Essentially, go to a drug company, if they say this is the sticker price, we had to pay it.
INSKEEP: Yeah, but are you expecting them to try to recoup their losses by just finding another profit center?
BECERRA: Well, I doubt they're going to be losing money, but let's find out. They negotiated, they voluntarily offered some of these prices and so it was a good negotiation. I don't think anyone's going to lose money. They're going to continue to put out those products that make them a lot of money.
INSKEEP: OK. Now, the companies, as you know, some of them are suing, saying that this kind of negotiation will deter research on new drugs. And this is, of course, a common thing that pharmaceutical companies say, the high prices support research for new products. How do you respond to that?
BECERRA: Steve, every one of the companies that have these 10 drugs sued us to stop us from negotiating with them. And every one of them voluntarily participated in the negotiations. They submitted offers, they submitted counteroffers and we reached a fair price. And so, you know, this is America. They're free to do what they want to do, including make a lot of money. We're free to try to get the best price for tens of millions of Americans. It's America, and so we'll keep moving forward. They've gone to court. They haven't won one case yet. And so we'll just keep moving forward.
INSKEEP: Do you think that this will, then, become the normal way of doing business? You will regularly be negotiating with drug companies on an ever-increasing list of drugs to drive down prices where you can?
BECERRA: By God, I hope this is the way it's going to be. Why would anyone want to have to pay sticker price when you know that's not what it really costs and that's not what it takes to make a profit? We deserve, on something like a lifesaving medicine, to get the best price, not just pay whatever a manufacturer wants to charge us. Let them make their money, but let us continue to live and have access to the lifesaving medications that we need. No person should have to cut their pills in half to make them last till they have enough money to buy the batch of drugs.
INSKEEP: Secretary Becerra, I want to ask about another thing because some people will recall that you were a former attorney general of the state of California. I believe you spoke with this program when you were in that role. And in that job, you succeeded Kamala Harris, who was also an attorney general of the state of California. So you share that experience. You know her well. I know it's not your role as a sitting official to campaign, but you have this past experience. How does that experience of being attorney general of California prepare you, her or anyone for the national stage?
BECERRA: Well, she was the prosecutor for the largest state in the nation. She has been the vice president overseeing - by the way, Vice President Harris cast the deciding vote in the Inflation Reduction Act...
INSKEEP: True.
BECERRA: ...Which made possible our negotiations. Without her vote, we would not be here talking about lower prescription drug prices. So I've seen her in action for years. She is someone who is dogged and determined, and she gets things done. And thank God she doesn't back away.
INSKEEP: She sometimes has cast herself or been cast as a cop, as someone who's tough in law enforcement, sometimes has cast herself as a reformer who would like to change injustices in the criminal justice system. What's your impression of what she really was as attorney general?
BECERRA: Firm, determined, compassionate, a prober, someone who could make sense of things and then would launch. And once she makes a decision, she knows to go. And you have to. When you're a prosecutor, that's what you have to do, but you have to have the facts behind you. And so it is good to have someone who will possibly lead the nation who understands what it means to collect all the facts first, but then once you do, move.
INSKEEP: Xavier Becerra is the secretary of Health and Human Services. Good to talk with you again. Thanks.
BECERRA: Thanks, Steve.
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