As Prepared for Delivery
Good morning, everyone. It’s a pleasure to join all of you for the inaugural convening of the White House Competition Council.
I want to thank President Joe Biden and Vice President Kamala Harris for their vision on this issue. And Brian Deese, for leading today’s important discussion.
A little more than two months ago, President Biden stood in the State Dining Room and called on all federal agencies to promote competition in our economy.
He said, “Capitalism without competition is not capitalism. It’s exploitation.” And perhaps nowhere is that exploitation more rampant and harmful than in our health care system, where millions of Americans struggle every day to access and afford the care they need.
Following the President’s lead, our team at the Department of Health and Human Services got to work right away.
Front and center is the issue of high prescription drug costs.
I am no stranger to this issue. As Attorney General of California, I spearheaded the fight against greed and exploitation in the drug industry. I am proud to continue this fight in my new role as HHS Secretary.
Put simply: Americans pay too much for prescription drugs—more than $1500 per person. That’s far higher than in any comparable nation.
This burden falls heaviest on the uninsured, low-income families, people with disabilities or chronic conditions, and communities of color.
And the numbers are only getting worse. Retail prescription drug spending increased by nearly 6 percent from 2018 to 2019, and retail prices for widely-used brand drugs have been increasing faster than inflation.
In fact, the costs are so high that many Americans simply can’t afford to take the medications they need to stay healthy. Americans like Alec Smith, a 26-year-old father who died after trying to ration his insulin because he couldn’t afford the price.
When Alec’s mother testified before Congress in 2018, she said, “This should have never happened, and I am counting on you all to help make sure it does not happen to another family.”
That’s why we’re here. Because at the root of this grim reality is a dangerous lack of competition in our economy.
Today, at President Biden’s request, we harnessed what we know on prescription drug costs and competition.
At HHS, we held listening sessions with consumer groups, independent experts and researchers, and stakeholders from across the health care system. We inventoried our existing work addressing this important issue to develop a strategy for tackling this problem on a large scale.
And today, I’m pleased to present our comprehensive plan to lower drug prices.
Our approach is grounded in three guiding principles.
First: We need to make drug prices more affordable and equitable for all consumers and throughout the health care system.
That starts with supporting legislation to let Medicare negotiate drug prices with manufacturers, as well as allowing private insurers and employers to access these prices if they choose.
It also means capping drug spending in Medicare Part D for seniors and persons with disabilities for catastrophic costs—and addressing this spending across the system. Because access to life-saving drugs shouldn’t eat up anyone’s life savings.
Focusing on addressing high costs is a guiding principle in our Plan and work, and it could lead to hundreds of billions of savings for the government.
Second: We need to promote competition across the prescription drug industry.
Delay tactics and abusive conduct in the prescription drug market are nothing new, and something that I have long tackled in my career.
That’s why we’re focused on promoting the development and availability of biosimilar and generic products to generate greater competition and lower prices in the market.
We also want to increase transparency for prescription drugs, so patients and insurers know what prices they’re truly paying.
And third: We need to foster scientific innovation to promote better health care and improve health.
Right now, drug companies are incentivized to game the market, pay off their competitors, and price-gouge their consumers.
We have the best scientists in the world. But that’s cold comfort to Americans who can’t afford the drugs they need to survive.
We need to build a system that supports both public and private research—one that rewards the discovery of valuable and accessible new treatments, not market gaming and price gouging.
Of course, this is just a summary of the Plan and a small snapshot of the critical work HHS is doing to lower drug prices.
We’re working on initiatives such as promoting transparency in health care, supporting the No Surprises Act, and implementing a rule that would allow hearing aids to be sold over the counter. We’ll also engage state and Tribal partners to implement safe prescription drug importation programs.
We still have work to do. But our Plan provides a bold blueprint for moving forward.
Through negotiation, competition, and innovation, we can lower prescription drug prices while still producing groundbreaking discoveries.
We can save lives and livelihoods.
And we can build the health care system the American people deserve.