Biden, Harris 'just getting started' on IRA drug price cuts

In their first joint appearance since Joe Biden withdrew from the Presidential race to be replaced on the Democrat ticket by Kamala Harris, the duo celebrated the long sought-after Medicare drug price reductions – and reaffirmed their commitment to extend the programme.

"For years, Big Pharma has often inflated the price of life-saving medicines," said Harris, who set the tone of the event by speaking first. "For my entire career, I have tried to hold bad actors accountable and lower the price of prescription drugs. As Attorney-General of California, I took on pharmaceutical companies for excessive marketing and illegally inflating the cost of drugs, and we won billions of dollars."

Sharing the stage at Prince George's County Community College in Maryland with Biden, Harris' remarks left little doubt about her determination to build on the Medicare negotiation policy if she beats Donald Trump in the forthcoming election.

"As Vice President, together with Joe Biden our President, we finally addressed the longstanding issue that, for years, was one of the biggest challenges on this subject, which was that Medicare was prohibited by law from negotiating lower drug prices – and those costs then end up getting passed on to our seniors."

Harris added that she was "proud to have cast the tie-breaking vote that gave Medicare the power to negotiate and let it get to the President's desk, and proud when our President Joe Biden signed that bill into law."

Yesterday, after years of political wrangling and months of legal challenges, the Biden administration announced the result of the first Medicare drug price reductions – introduced by the Inflation Reduction Act – which saw 10 big-selling medicines have their prices reduced by between 38% and 79% from 1st January 2026.

Biden said after taking the platform that they were "just getting started" and that he and Harris "are going to keep standing up to Big Pharma" – in reference to numerous legal challenges brought by the industry seeking to reverse the programme. He insisted: "I fought too damn hard to yield now. We're not backing down."

"We know it is not just about healthcare, it is about your dignity," said the President. "It's about peace of mind. It's about security. It's about taking care of your family. It's about giving folks just a little bit more breathing room."

He also threw a barb at the Republican party over the issue. "For years, Big Pharma blocked Medicare for negotiating lower drug prices," he said. "This time, we finally beat Big Pharma. And, I might add, with no help from Republicans. Not a single Republican voted for this bill, period."

First round of cuts will have 'modest' impact on pharma

As the dust settles on yesterday's announcement, the analysis of this first round in the programme is also getting underway.

Jeff Jonas, portfolio manager at investment group Gabelli Funds, commented that there were "no real surprises in this round," with an approximately 22% reduction off the current net price for the ten drugs.

"I'd note that most of these drugs are older and near patent expiration, so the impact is pretty modest," he added, but cautioned that it will "start to get more painful over time," with 15 more drugs chosen for 2027.

That will likely include Novo Nordisk's semaglutide-based therapies Ozempic and Wegovy for diabetes and obesity, respectively, he predicted, while the 2028 round could see MSD's blockbuster cancer drug Keytruda (pembrolizumab) come into scope.

"There was […] some speculation that the government went easy on the pharma companies this year, given that it is both an election year and the first time they're doing this," said Jonas. "So, manageable for now, but will be a headwind and something to watch in the future."