have a great economy for generating wealth for america, but none of that comes back to individual people. i would like to say, also, a little bit of an aside, i agree with the caller who called for neither and was concerned about the trafficking of migrant children and other children as well. to their point about the word trafficking, that is a technical term for all the awful stuff we do to people, but i would like to see that addressed by either candidate as well. i don't always necessarily agree with the particular spin on it, but any promotion of the series issue of one of the most horrible things we could do to a human being is always good to have in the public this course, i think. host: we will let it go there

because i want to get in one more call in this hour. caleb from mississippi, calling on the other line. good morning. are you there? caleb, mississippi? caller: i'm here. host: caller: the other caller spoke on the border. how much money are we paying to store those items we are not using to build the wall? washington journal continues. host: welcome back. joining us is lauren gardner, an fda politics reporter for politico. thank you for joining us. here is your headline.

we will put it on the screen. medicare has set prices for 10 drugs, saving billions. let's talk about that. who will be impacted by the negotiation's? guest: the biden administration is saying that everyone on medicare will be impacted by this. when they made the announcement on thursday, they said they expect the initial negotiations to save $6 billion to the medicare program and that $1.5 billion of savings will be realized by anyone on medicare with prescription drug coverage. that would be because they the expectation that if prescription drug plans are saving money on these 10 drugs, they will pass at least some of those savings onto beneficiaries. host: you mentioned 10 drugs. what types of medications were included and why did they select those? guest: the first 10 drugs had to

be selected because they are among the drugs that medicare pays the most money for. there were lots of other factors at play and we expect more from medicare about how and why they made this decision. we can expect these were the drugs they were paying the most money for. these drugs cover everything from diabetes, blood clotting drugs and some that treat cancer. host: you mentioned the top line number, a pretty big amount. how much will the average beneficiary save and what factors will impact the amount? guest: good question. what we still have yet to find out is how this will trickle down because the prices

announced on thursday were related to the listed price of the drugs. the list price is not what someone phase -- someone pays at the counter. you are not just paying $1500. i pulled that out of thin air. there are negotiations behind the scenes. this is proprietary information. this is not open to the public. on top of the list price discounts that the administration announced, there will be more negotiations with pharmacy benefit managers that will happen behind the scenes between drug manufacturers and medicare prescription drug plans. that will ultimately affect what beneficiaries pay for their drugs at the pharmacy. host: when can we see those know prices go into effect? guest: january 1, 2026.

we still have a ways to go for them to be implanted. the administration announced this before the democratic national convention and they want to highlight this going into the fall campaign season. the big hurdle for them will be publicizing this and trying to make voters understand how this will affect them and remember that at the polls in november even though this will not kick in right away. host: we have lauren gardner joining us for the next 40 minutes, talking about the medicare prescription drug price negotiations. if you have a question, start calling now. in the eastern or central time zones, (202) 748-8000. mountain or pacific, (202) 748-8001.

a special line if you are a medicare bill yeary -- medicare beneficiary, (202) 748-8003. let's talk about the negotiations. what don't we know and when can we find out more information about -- what information are we still expecting? guest: when it comes to this round of negotiations, what we are still waiting to hear, like i mentioned earlier, medicare is legally obligated to publish by march 1 an explanation of how they got to the prices they got to that were just announced. there will still be des divulge proprietary nature of a lot of this. i am personally very interested to see how they and to what

extent they explain how they were able to reach, for example, some of these drugs they got 66% discounts on and others it was more in the range of 30%. how did that differential come into play? that is something people are curious about. host: these are the first 10 medications. tell us about the schedule of their timeline for the next set of drugs. guest: medicare this fall will be putting out more guidance about how they are administering this program because there has been a little bit of building the plane as it flies. the laws that gave medicare this power did not give them a lot of time to get this going so there was a lot of hiring as we go and trying to figure this out. there is even more guidance coming about how they will approach this next round of

negotiations and february 1 is when we will get the next list of drugs and that is expected to be up to 15 part d drugs. not anything that is administered in a doctor's office or hospital but drugs at the pharmacy counter. host: these new prices, this announcement came and it was something that president biden and vice president harris were both touting. i want to play this of president biden talking about it and get your reaction. [video clip] >> i gave medicare the power to negotiate lower drug prices just like the department of veterans affairs. in fact, one of the first major bills i worked on was in 1973. i cosponsored legislation led by senator frank church, to negotiate the cost of drugs.

1973 this fight has been going on. the v.a. pays 50% less because the v.a. can negotiate the prices, as they should. for years, they formed a block on negotiating drug prices and they have been able to maintain exorbitant pricing that is uncalled for. this time we have finally beat big pharma. [applause] host: that was president biden talking about his longtime effort to reduce the price of prescription drugs. remind our audience why they were not able to previously negotiate and what changed. guest: when medicare part d was first introduced in the early 2000, that was part of the haggling that went on on capitol hill was that they would not

have the power to negotiate prescription drug prices. this is something the pharmaceutical industry has fought for decades. their argument is that if you introduce this power to a program like medicare, the medicare and medicaid drug market covers about half the country. it is pretty large. if that power exists, then they will not make enough money for research and development, innovating on new drugs. that will not necessarily impact beneficiaries in the way in which the administration hopes. their argument is also that the pharmacy benefit manager, the insurance plans, they are the ones who have more of an impact on how much people are paying for the drugs rather than the drug companies themselves. it has been a very intense effort. i think a lot of people were surprised two years ago when this ended up passing congress because it has been a pretty steady opposition for a very long time.

the political winds just shifted against the pharmaceutical industry. host: let's bring our audience into the conversation. we will start with ted in seattle on the line for medicare beneficiaries. good morning. caller: good morning. i would like to ask lauren if any president who is elected in 2024 will receive this benefit in 2026. guest: whether the next president continues this, we can definitely expect vice president harris to continue this. she has already said she wants to expand the benefits of this program beyond medicare to anyone with health insurance. that would take legislation and would be a very tall order.

the expectation is she would continue this program for speed ahead. when it comes to president trump , that is a bigger question mark. he also had some interesting rhetoric regarding prescription drug prices in the pharmaceutical industry that does not track with his party and is much more interested in trying to lower those prices. whether he would continue the program or try to leave his mark on it is more of an open question. host: pauline in pennsylvania. good morning. caller: i would like to ask her one question. most people on medicare have advantage plans and some of them cover drugs completely. you do not even have a co-pay. some of us have a co-pay. therefore, let's say one drug is

reduced by $500. we are not saving. it is the federal government that is saving. they would have been better if they got the doughnut hole where people have to pay a higher price. it seems to me a lot of rhetoric when people on medicare already have these plans that cover all of their medications. how does that really benefit us when you say the price of the drug would be cut in half when knowingly we do not pay that? if you did not take medicare, i would help you but medicare already has drug coverage. if you take. one of the advantage plans which a lot of people do not even have to pay for, that covers your drugs. host: let's get a response. guest: that is a great point.

there are other factors that play into what beneficiaries are actually paying when they have to pick up these drugs. when it comes to the doughnut hole, starting in 2025 the insurance are picking up the cost of that gap, that coverage gap. that was also part of the law that gave medicare the power to also negotiate drugs. to your point on co-pays, yes. that is an open question. how will that impact anything like that? based on how my health insurance works, my co-pay is my co-pay. how these effects will trickle down to beneficiaries is still very much an open question. you are right, it saves the plan money and how that translates to the individual beneficiary is

what we do not know beyond the estimated $1.5 billion of savings the administration has been touting. host: let's hear from jb in arkansas on the medicare line. good morning. caller: good morning. i was just curious. who actually handles these negotiations with big pharma? is it the biden administration, congress? who is it that negotiates these prices? guest: medicare hired several people to work on these negotiations. the folks who work at medicare, pharmacists, actuaries, you have policy folks who have been steeped in prescription drug policy for years. many different people have been involved in these negotiations. it happens at the administration level. it is the executive branch, not

members of congress. host: one of your articles notes that nine manufacturers of the drugs selected also opted into the process to negotiate under the law but also say they did not have a choice. guest: yes. that has been a very common refrain from these companies. one of the lawsuits i believe termed it as a gun to the head, that they did not have a choice because if they did not often, if they did not -- if they did not opt in, they would pay an excise tax that would be absorbed and -- exorbitant. or they could pull all of the drug from the market. not just the drugs on the negotiation list but all of the companies drugs covered by medicare, they would have to pull them from the market and all the companies said, we cannot do that. whether it is financially.

also they argue it would be a disservice to americans. that's why they say this is not much of a negotiation from their point of view. host: michael in new jersey also on the medicare line. good morning. caller: good morning. several questions that have not been touched on. any price controls impact people , you will see you shortly with kamala harris. let's talk about drug prices. what will happen to research, i will not ask you but this is what will happen. drug companies will develop drugs that will be basically focused on a non-medicare market , if they have a choice. for example, these weight reduction drugs which are used for weight reduction and diabetes, diabetes is a medicare market.

weight reduction is a youth market. the emphasis by the drug company will be on essentially weight reduction and out of essentially diabetes. that basically means the people who have diabetes will have to wait. the second issue is basically the cancer drugs. cancer drugs are developed over a period of 10 years. essentially they start out, let's just say lung cancer, then brain cancer. what lauren has not mentioned is the restriction on protection for drug companies going out. what is the short answer to this? later stage indications for cancer patients will not happen because companies will be faced with price negotiations for later stage indications in

oncology, in other tertiary areas other than the principal indication. i think people say they will get a free lunch with this but realize essentially when it comes out to research, this will have a dramatic impact on people looking for -- guest: on your second point, that is something that pharmaceutical companies and their allies have been talking about. this could discourage them from both innovating on drugs that already exist. often times when a cancer drug is approved, that is not the end of the line. they usually continue to conduct clinical trials to see what other types of cancer that drug could potentially treat. there is concern that this program could have a dampening effect on that. when it comes to diabetes and weight loss drugs, first off,

when it comes to the drugs that everyone knows like olympic -- ozempic, there are different brand names and ingredients, but the diabetes drugs could come up for negotiation in the next round. it remains to be seen. it definitely could be a contender. the weight loss drugs too. obesity is a problem across age groups in the united states. once those separately branded drugs get into the time period of which they could be eligible for negotiation, they could get lumped into this program in later years. host: there has been reaction from the pharmaceutical industry. they put out a statement yesterday, a couple ofago, "the administratio is using the iras price setting scheme to

drive political headlines but patients will be disappointed when they find out whaiteans for them. there is n assurance for out-of-pocket costs because th notng to rein in insurance companies who timalyecide what medicines are covered and what patients pay at the pharmacy. as a result ofhe ira, there are fewer part d plans to choose from andums e going up. meanwh insurers are covering fewer medicines and thehey intend to impose further restrictions as the pricing scheme is intated. more than 3 million beneficiaries take medicine with government set pricing." i know we talked about this a little bit. your reaction to that statement? guest: we do not know where on the formulary which is when you have your insurance and you find

out what drugs are fully covered , what drugs you might have to pay co-pay or coinsurance on. there are different tiers. typically brand-name drugs that are more expensive, you might get some coverage of but you still pay more money because they are on a certain tier of your formulary. we don't know where these negotiated drugs will fall on the formularies of party plans -- part d plans. the medicare program says they will be assessing where these end up and make sure that they conduct due diligence to make sure there are not any access issues for beneficiaries. we do not know how this will pan out when it comes to this manifestation of how beneficiaries are able to pay for the drugs. that still remains to be seen.

host: let's hear from ken in pennsylvania. good morning. caller: i'll just say that i started taking insulin one month ago. i went to get the needles to inject the insulin and my co-pay was $55. i don't know where you are saving money at. i don't know what you pay if you don't have good hospitalization. thank you. guest: insulin, that is a big ticket item. there were insulin products included in the first negotiation round. several products made by nova nordisk. there is the $35 insulin cap that has already come into play. we have not talked about the $2000 out-of-pocket cap that will go into effect next year

for medicare beneficiaries. a lot of things outside of the negotiation program that will be or are already affecting what beneficiaries pay at the counter or over a period of time. host: to that point, this text coming in from lee, part the medicare plans can change themularies at any time. if out-of-pocket costs are capped at 2000, what will stop the companies from dropping these drugs from their formularies? guest: the drugs are required to be covered on the formularies. what we don't know is where on the formularies. formularies at least in the private market typically change twice per year in january or july. we will not see the effects of this until 2026 so we still have a ways to go. where they are on the

formularies, we will see. host: theresa in florida on the line for medicare beneficiaries. good morning. caller: hello c-span. thank you for taking my call. i am a medicare recipient on part d medicare. i am currently taking eloquence -- eliguis, the blood thinner. my husband works. he is 73. i'm in my 70's. he works to pay for our prescriptions and food on the table which is not very easy these days. i just want to say that i think it is unacceptable that our government has to wait so long to stop these pharmaceutical companies from their prices being so high and to have to wait another year and a half for my eliquis to go down to be

affordable. i will be paying several thousand dollars to take my eliquis. i truly believe if trump gets into office, he will get things done and make this go a lot faster. guest: i think you are touching on a point that democrats are thinking a lot about right now which is how do we emphasize the benefit of this to beneficiaries but also take into account that this is not kicking in right away and that beneficiaries have to wait another year and a half to see the benefits of this program. in terms of what former president trump could do, that would require an act of congress to speed up the timeline. this got through congress on party-line vote. i do not anticipate that if

there would be any appetite to reopen this. host: cliff in oklahoma. good morning. caller: here we go again talking about cost per pill. it is too complicated for most seniors like myself. i am 65. my wife is almost 70. i opted out of part d because i can pay for my drugs cheaper by myself but she has one drug that is $20 per pill. we know for a fact it costs them $.50 per pill to make it. i have a supplement plan for her that keeps us out-of-pocket almost. the whole things needs to be renegotiated. i have friends in europe who laugh at what we pay for prescription drugs. i have friends in canada who think we are the laughingstock of the world. you go to mexico, you pay less

for prescription drugs. it is almost like dollars for your pills instead of $20 or $30 like in america. we have tummy lobbyists -- too many lobbyists. we need to take it back to free enterprise because it has not been free enterprise for 56 years now in the drug market. guest: this is definitely a point that many democrats and even some republicans like former president trump, a point that they have to hear. you hear how much patients pay for prescription drugs in europe and it is significantly less. these drugs tend to go to the american market first. they can start recouping costs more quickly whether there are

other programs in place to lower prices for citizens. host: the new list of the 15 drugs that will be selected for the next round is expected early next year, february 1. do we know what drugs may be included on that list? guest: we do not know exactly yet. there have been some analyses from analysts and researchers have -- there was a study last year of the drugs that experts expect could come for negotiation between 2026 and 2028. there are a few dozen drugs that people expect to be swept up into this. the big question would be there are a handful of drugs in that universe where generics or bio

-similars are expected to come into play. when the generic is on the market, the drug is no longer eligible. once you have the generic of eliquis, for example, eliquis is no longer part of this program. there are a couple of drugs on the initial list of 10 where we are expecting some generic competition in the next couple of years. there is a little bit of a runway. say a generic comes online next fall in 2025 for one of the drugs that just had their prices announced. it has to be on the market for at least nine months before the brand name can come off of the list. you will still get the negotiated price for that first year but once the generic has been on the market for that nine month period, it is no longer there. some of these other drugs that

could end up on the list, if generics come to market quicker, they might not get wrapped up into this after all. host: the pharmaceutical care management association, pcma, which has to do with pharmacy benefit managers, quickly remind people what that is. guest: they are the go-between between drug manufacturers and insurance plans. they negotiate prices that plans pay for drugs. they work with the manufacturers. they offer rebates and various other discounts. that is why it is hard to understand how much of a discount the administration got because they are comparing to the list price. they are not comparing to the net price because that is a black box. we don't know how many rebates and discounts have historically

been around for these listed drugs behind the scenes other than that they do exist. they are kind of part of this aspect of the drug pricing train that contributes a little bit of mystery to the process. they argue that we are here to help extract benefits for patients and that's what we do. host: that pharmaceutical care management association put t statement out in response to t price negotiation announcement, "while we shar administration'o duce prescription drug costs f american seniors and push back against the high prices by administration drug manufacturers administration, the ministrationas missed the mark for choosing researching drugs for which pdm's are already negotiating discount our analysis shows that

negotiation by pdm's already secured discounts on six o the 10 drugs chosen by these centers for medicare and medicaid rvices. the key to reducing drug crossed -- drug cost is to iree competition among manufacturers. we encourage the meditatioto focus on those drugs and allow pdm and negotiators to continue to deliver value and savings for medicare." guest: this touches on a critique of that initial list which is that a lot of those drugs do get heavily discounted behind the scenes. like i said, we only know so much about those discounts because we know what the list price is. all the discounting behind the scenes is opaque. also to their point, one of the interesting things about this

list was there is a cancer drug on the list and cancer drugs tend to not have these steep rebates and discounts compared to drugs that treat other conditions. i believe it was a 38% discount compared to the list price. that was the smallest discount of all the drugs on the list. to their point, we saw bigger discounts with some of these other drugs that may be had steeper rebates before this program came into play. there was a little bit of a lesser one for this drug. still, it is a discount and that is what the administration will be focusing on going forward. host: jim in maryland on the medicare line. good morning. caller: good morning.

you said you do not know where some of these drugs will end up on the different tiers. i forgot the word that you used. you do not know where they will end up yet. depending on where that drug ends up on these different levels, i forget the word that you used. what is the direct effect to medicare part d patients depending on which tier? if i'm taking eliquis and it is tier three, how does it affect me? host: we have difficulty hearing you but we will get a response. guest: that remains to be seen. everyone's benefits are slightly different whether you are covered under part d or you have a medicare advantage plan.

people are going to see this beginning next year as plans start to publicize ahead of 2026 where these drugs are going to fall. host: jeremy in illinois. go ahead. caller: i am in indiana. you must have a different jeremy. host: go ahead, jeremy. caller: i am from indiana. i did not know if you had the wrong call. i wanted to touch on the fast track that pushed the chemicals and big pharma drugs at a faster rate without taking long-term effects or research and development. all the chemicals that actually goes into our food and stuff, close to 200 that i know of. there are different patents on listeria.

host: a little off topic. anything you can share with jeremy? guest: no. host: that's fine. we will go to chris in pittsburgh on the medicare line. caller: good morning. this came out of the blue. i really was not following it. but i'm excited. the primary thing is the cap. i'm trying to figure out these different plans and how they apply to me, it's very complicated. if i know the cap i'm responsible for, it makes my decision-making easier. the other thing is you say it was hard to get through congress. i am wondering if it had anything to do with the oxycontin scandal with purdue pharma pushing all of this oxycontin in all of these little pharmacies that might have finally overcome all the money that was put the lobbyists in congress. guest: good question.

when it comes to how this got through, this has been a debate that has happened behind the scenes for 20 plus years. this was the timing where everything seemed to click. 2022, we were in the biden administration but even during the trump administration there was a lot of discussion and policymaking around prescription drug prices and a big focus on the sustainability, the questionable sustainability of what older americans pay for their drugs. that discussion happening over the course of several years preceding congress passing this law is what helped greece the

skids for this to move forward -- grease the skids for this to move forward. host: the inflation reduction act coming out, how much of that could a administration change impact medication prices going forward? guest: that is a great question. this is pretty baked into law. absent any of the lawsuits challenging this, and there are several, absent any of them having success, it is a bit of an open question about how a future administration could change things. every administration comes in and they can write rules and regulations and pieces of guidance that tweak programs around the edges until they can perhaps do more to completely overturn something or take a program in a different direction.

in other cases it is easy for them to pull something off the books. this will be much more complicated. a future administration that perhaps does not have the same viewpoint as the biden administration and as vice president harris has on this, they could make their mark around the edges. in terms of looking ahead to this election season and the trump administration, the past trump administration and what a theoretically future trump administration would look like, he was very interested in lowering prescription drug prices for seniors. could try to find a way to put a stamp on it. this is the law as of right now. host: you brought up lawsuits a few times. what have those lawsuits been focused on and would have the results been? guest: there are several lawsuits. the count is nine right now.

all of them focus on constitutional arguments, that this program violates the constitution in one or multiple ways. so far most of the companies that have drugs on this list have sued. there are also two trade associations, a major one and the u.s. chamber of commerce. so far none of them have succeeded. these lawsuits are filed in federal district court, then they can get appealed to an appellate court. the ultimate goal for these folks is the supreme court to have them weigh in on whether this is constitutional. some argue this violates the first amendment right to free speech by making didn't say it is a maximum fair price and they do not think this is fair. others are focusing on a clause that says this is the government taking their private property

without just compensation. others are saying that this violates different other various aspects of the constitution. none of these have succeeded in court yet but it is still early. only some of them have gotten to the appeals process so far. host: we have time for one more call. john in pennsylvania. good morning. caller: good morning. my comment is that one of the arguments by the pharmaceutical companies is if you lower the price is it will affect research and development. that argument is phony because a vaccine was produced by jonas salk. all of the universities in this country have research departments. the argument about the research

and development by pharmaceuticals is really a phony argument. trump was in office for four years and never mentioned lowering prices for drugs as far as i can remember. no matter what the president proposes, congress disposes. we hope that congress comes in hopefully is more democratic, more liberal than the one we have now in the house. guest: you made one of my favorite points which is that a president can do what they want to do but at the end of the day congress is really who writes the laws. yes, that is definitely a fair point. on research and development, there is a lot of skepticism among various folks who are

skeptical that this will have much of an effect on r&d. i will say that based on some of the earnings calls that drug company ceos have participated in in the last several weeks, while they are certainly not happy with the negotiation program, most of them have noted that the company is going to weather the first round just fine. the point they like to make is that they don't know how this will impact decisions in future years. they are still doing ok when it comes to their shareholders. host: lauren gardner with politico. find her reporting at politico .com. find her at x at