Done deal! Big Pharma will cut prices of 10 drugs in Medicare price negotiation program
After top drugmakers unsuccessfully tried to squash the program, HHS has finally reached agreements with Merck, Novartis and others to lower prices for the first 10 drugs included in the Medicare Drug Price Negotiation Program.
The Biden administration announced on Thursday that the Department of Health and Human Services has reached agreements with top drugmakers to lower drug prices for the first 10 drugs included in the Centers for Medicare & Medicaid Services’ Medicare Drug Price Negotiation Program under the Inflation Reduction Act.
The drug list, which includes some of the most popular drugs used by millions of older Americans to help manage diabetes, blood cancers and prevent heart failure or blood clots, includes:
- Eliquis, a blood thinner (Bristol Myers Squibb/Pfizer)
- Xarelto, a blood thinner (Johnson & Johnson)
- Januvia, a diabetes drug (Merck)
- Jardiance, a diabetes drug (Boehringer Ingelheim/Eli Lilly)
- Enbrel, a rheumatoid arthritis drug (Amgen)
- Imbruvica, a drug for blood cancers (AbbVie/J&J)
- Farxiga, a drug for diabetes, heart failure and chronic kidney disease (AstraZeneca)
- Entresto, a heart failure drug (Novartis)
- Stelara, a drug for psoriasis and Crohn’s disease (J&J)
- NovoLog, for diabetes (Novo Nordisk)
The drug discounts, agreed to after months of negotiations with drug manufacturers which began last October, range between 38% and 79%. That is the medication’s cost before any discounts or rebates are applied, but not what the price people actually pay when filling their prescriptions. For example, the negotiated price for a 30-day supply of Eliquis was reduced from $521 to $231. The new pricing will take effect in 2026.
According to the White House, Medicare spent $50 billion covering the drugs last year and taxpayers are expected to save $6 billion on the new prices in its first year of implementation, which will be 2026. Older adults could save as much as $1.5 billion in total on their medications in out-of-pocket costs.
It’s a landmark deal for the Medicare program, which provides health care coverage for more than 67 million older and disabled Americans. For decades, the federal government had been barred from bartering with pharmaceutical companies over the price of their drugs, even though it’s a routine process for private insurers.
Aside from Medicare recipients, 3.4 million employees used at least one of the 10 drugs that have been newly negotiated, according to the Peterson-KFF Health System Tracker. The most widely-used drug for people with employer-sponsored health insurance was Jardiance, which was taken by more than 911,000 enrollees.
Related: Judge skeptical of government ‘price setting’ in PhRMA’s Medicare drug negotiation lawsuit
Drug manufacturers and industry groups had tried unsuccessfully to file lawsuits to stop the drug negotiations, contending that the program was unconstitutional.
Next year, HHS can select another 15 drugs for price negotiations.