Medicare and its enrollees to save billions from historic drug price negotiations, Biden administration says

Medicare’s new power to negotiate drug prices will lead to an estimated $6 billion in savings for the federal government and a $1.5 billion reduction in out-of-pocket costs for seniors when the lower prices take effect in 2026, the Biden administration announced Thursday.

Medicare’s new power to negotiate drug prices will lead to an estimated $6 billion in savings for the federal government and a $1.5 billion reduction in out-of-pocket costs for seniors when the lower prices take effect in 2026, the Biden administration announced Thursday. The negotiation program, which was authorized by the 2022 Inflation Reduction Act, has been a central talking point of the White House’s efforts to lower Americans’ cost of living, including for prescription medications, after inflation skyrocketed during President Joe Biden’s term. Vice President Kamala Harris is expected to continue campaigning on reducing drug prices in the runup to November’s election. “It’s a relief for the millions of seniors that take these drugs to treat everything from heart failure, blood clots, diabetes, arthritis, Crohn’s disease, and more – and it’s a relief for American taxpayers,” Biden said in a statement. The administration is scheduled later Thursday morning to release more information about the results of the negotiations with drugmakers, who have been trying – unsuccessfully, so far – to quash the program in federal court. However, officials are not expected to provide details about the cost cuts for each medicine. The initial round of negotiations focused on 10 of the most widely used and expensive drugs taken by Medicare enrollees. The medications are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica and Stelara, as well as Fiasp and certain other insulins made by Novo Nordisk, including NovoLog. The $6 billion in savings estimate is based on Medicare’s 2023 cost for these drugs, Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, told reporters. The figure takes into account rebates and discounts provided to Part D plans by the drugmakers, or the so-called net price, according to the administration.