Current Events Public Policy

Biden State of the Union Address 2022: Focus on Health

As I do every year, below are the highlights of the state of the union address related to health care.

Capping insulin prices

First, cut the cost of prescription drugs. We pay more for the same drug produced by the same company in America than any other country in the world. Just look at insulin. One in 10 Americans has diabetes. In Virginia, I met a 13-year-old boy, the handsome young man up there, Joshua Davis.
He and his dad both have Type 1 diabetes, which means they need insulin every single day. Insulin costs about $10 a vial to make. That’s what it costs the pharmaceutical company.
But drug companies charge families like Joshua and his dad up to 30 times that amount. I spoke with Joshua’s mom.
Imagine what it’s like to look at your child who needs insulin to stay healthy and have no idea how in God’s name you’re going to be able to pay for it.
What it does to your family, but what it does to your dignity, your ability to look your child in the eye, to be the parent you expect yourself to be. I really mean that, think about that. That’s what I think about.
You know, yesterday, Joshua is here tonight, but yesterday was his birthday. Happy birthday, buddy, by the way.
For Joshua, and for the 200,000 other young people with Type 1 diabetes, let’s cap the cost of insulin at $35 a month so everyone can afford it.
And drug companies will do very, very well — their profit margins.

The statements pose a number of questions. If you are capping the price of insulin at $35, is this the patient out-of-pocket cost or the price the manufacturer receives? If it is the patient cost, this is a sensible strategy. While the goal of cost sharing is to reduce moral hazard, for life and death medications–such as cancer and insulins–patients are likely not overusing these drugs. As Scott Gottlieb once said, “Patients shouldn’t be penalized by their biology if they need a drug that isn’t on formulary…After all, what’s the point of a big co-pay on a costly cancer drug? Is a patient really in a position to make an economically-based decision? Is the co-pay going to discourage overutilization?” The same principles apply to insulin.

One should note that while insulin list prices have increased 40.1% between 2014 and 2018, net prices received by manufacturers have actually fallen by 30.8%. Who is winning in this scenario? Pharmacy benefits managers (PBMs); PBMs had their share of insulin revenue increase 154.6% in recent years.

Allowing Medicare to negotiate drug prices

And while we’re at it, let’s let Medicare negotiate the price of prescription drugs. They already set the price for V.A. drugs.

The impact of Medicare drug price negotiation would depend on whether Medicare can exclude drugs from coverage. If Medicare can negotiate with manufacturers, but is not allowed to exclude certain drugs, then Medicare’s ability to reduce prices will be modest. If Medicare is able to exclude drugs from coverage, prices will fall, but patients will be worse off as some of the drugs they desire will not be covered. In the long-run, there also be less R&D investment in innovation if reimbursement falls.

In fact, the Congressional Budget Office has already evaluated how Medicare drug negotiation would impact new drug development. CBO finds that there would be an 8% reduction in the number of new drugs brought to market under Medicare price negotiations.


If we want to go forward — not backward—we must protect access to health care. Preserve a woman’s right to choose. And let’s continue to advance maternal health care in America

Addressing the opioid epidemic

First, beat the opioid epidemic. There is so much we can do. Increase funding for prevention, treatment, harm reduction, and recovery.
Get rid of outdated rules that stop doctors from prescribing treatments. And stop the flow of illicit drugs by working with state and local law enforcement to go after traffickers.
If you’re suffering from addiction, know you are not alone. I believe in recovery, and I celebrate the 23 million Americans in recovery.

FDA announced earlier this month steps to facilitate the development of non-addictive alternatives to opioids for acute pain management. As opioids have significant spillover impacts–impact on the criminal justice system, on loved ones, and beyond–addressing it is important to address this crisis. Just last week, 4 companies agreed to pay $26 billion to settle claims that fueled the opioid crisis.

Mental Health

Second, let’s take on mental health. Especially among our children, whose lives and education have been turned upside down…

And let’s get all Americans the mental health services they need. More people they can turn to for help, and full parity between physical and mental health care.

The burden of serious mental illness is often overlooked. A recent white paper found that the economic burden of one mental illness–schizophrenia–was more than $280 billion per year.

Health coverage for veterans

The VA is pioneering new ways of linking toxic exposures to diseases, already helping more veterans get benefits. And tonight, I’m announcing we’re expanding eligibility to veterans suffering from nine respiratory cancers.
I’m also calling on Congress: pass a law to make sure veterans devastated by toxic exposures in Iraq and Afghanistan finally get the benefits and comprehensive health care they deserve.

Ending cancer

And fourth, let’s end cancer as we know it. This is personal to me and Jill, to Kamala, and to so many of you. Cancer is the #2 cause of death in America — second only to heart disease.
Last month, I announced our plan to supercharge the Cancer Moonshot that President Obama asked me to lead six years ago.
Our goal is to cut the cancer death rate by at least 50% over the next 25 years, turn more cancers from death sentences into treatable diseases. More support for patients and families.
To get there, I call on Congress to fund ARPA-H, the Advanced Research Projects Agency for Health. It’s based on DARPA — the Defense Department project that led to the Internet, GPS, and so much more. ARPA-H will have a singular purpose — to drive breakthroughs in cancer, Alzheimer’s, diabetes, and more.

Science has a nice summary of ARPA-H, which will be housed within the National Institute of Health and have a $6.5 billion budget. ARPA-H will rely on program managers to make funding decisions rather than peer-reviewers. This approach works well if program managers are better at picking the winners that peer-reviewers; but worse if the reverse is the case.

These types of government funding for basic research are vital to the life sciences engine. Basic research is complement to later state drug development. However, much of the benefits of an ARPA-H could be counteracted if drug price negotiations limits the incentives for life science companies to do the rigorous testing on animals and humans to insure treatments are safe and effective.

Health care industry consolidation

And as Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch. Medicare is going to set higher standards for nursing homes and make sure your loved ones get the care they deserve and expect.

End of the mask mandate

the Centers for Disease Control and Prevention — the CDC—issued new mask guidelines.
Under these new guidelines, most Americans in most of the country can now be mask free.
And based on the projections, more of the country will reach that point across the next couple of weeks…
We will continue to combat the virus as we do other diseases. And because this is a virus that mutates and spreads, we will stay on guard.

Biden mentions four pillars to combat COVID-19: (i) vaccines, (ii) increased availability of anti-viral treatments to treat people who get COVID, (iii) additional COVID-19 testing availability, and (iv) free masks if you are immuno-compromised, (v) end the shutdown of schools and businesses, (vi) continue to distribute vaccines to other countries. All steps are highly sensible given the current COVID-19 case trends.

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