Biden administration says Medicare negotiated price discounts on 10 prescription drugs
The Biden administration said Medicare negotiated discounts with pharmaceutical companies on 10 drugs prescribed to treat cancer and heart disease.
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Older Americans on Medicare who take 10 widely prescribed drugs such as Xarelto or Eliquis will get a break on the medications’ list prices beginning in 2026.
The Biden administration announced Thursday that Medicare had negotiated discounts with pharmaceutical companies on 10 drugs prescribed to treat blood clots, cancer, heart disease and diabetes. The drugs are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and the insulins Fiasp and NovoLog.
The discounts will range from 38% to 79% when the negotiated prices take effect in 2026. The bargaining will save Medicare $6 billion when the price cuts are implemented in two years, according to U.S. Department of Health and Human Services estimates.
Medicare enrollees can expect to save $1.5 billion in out-of-pocket costs, HHS said.
The list price of Merck’s diabetes drug Januvia will be slashed to $113 for a 30-day supply from $527 as of 2023. Eliquis, a blood thinner from Bristol Myers Squibb and Pfizer, will cost $231 for a 30-day supply, down from $521. Consumers can see a list of the 10 discounted drugs here.
Under President Joe Biden’s 2022 climate and health legislation called the Inflation Reduction Act, Medicare was empowered to negotiate prices with pharmaceutical companies on a limited number of medications. Another 30 drugs will be selected over the next two years for negotiated prices that will be rolled out in 2027 and 2028.
“For the first time ever, Medicare negotiated directly with drug companies, and the American people are better off for it,” HUD Secretary Xavier Becerra said.
Vice President Kamala Harris, who delivered the tiebreaking vote in the Senate to pass the legislation in 2022, was expected to tout the cost savings for seniors in a campaign stop Thursday.
The discounts won’t apply to most working-age Americans insured through the workplace. An analysis by KFF, a private nonprofit health policy organization, found that of the 167 million people with employer health insurance, 3.4 million took one of 10 drugs negotiated by Medicare. Employers typically bargain for lower-cost prescription drugs through insurance companies and pharmacy managers.
Other provisions of the federal law allow Medicare enrollees to get recommended vaccines with no cost-sharing and limit out-of-pocket costs at $35 for covered insulin products. In 2025, enrollees in Medicare’s Part D drug plans will have their out-of-pocket expenses for prescriptions capped at $2,000 a year.
Drug companies warn legislation could delay lifesaving cures
Drug companies and their industry allies have filed several lawsuits challenging different aspects of the federal law. But so far, the drug companies have not halted negotiations.
The Pharmaceutical Research and Manufacturers of America, a trade group representing drug manufacturers, has argued the federal efforts to negotiate prices have lacked transparency, discounted patients’ input, and could reduce drug industry investments to research lifesaving cures. According to one survey of PhRMA members, 78% of drug companies said they expected to cancel early-stage drug research projects because of federal legislation.
Sen. Amy Klobuchar, D-Minn., said the 2022 federal law will bring financial relief to millions of older Americans who struggle to pay for prescription drugs. In a media call Wednesday, Klobuchar said more than 70% of Americans favor Medicare drug price negotiations.
“They’ve been trying to stop us in court,” Klobuchar said Wednesday. “We’ve got the law on our side, we’ve got the facts on our side, and we have the people on our side. We’re going to get this done.”