Biden administration announces 10 drug price cuts in Medicare talks that will save $6 billion

The Biden administration said Thursday that drug price negotiations will shave hundreds of dollars — in some cases thousands — off the cost of Medicare’s 10 most popular and expensive drugs.

The rebates, agreed after months of negotiations with drugmakers, range between 38% and 79% of the drug’s list price, which is the drug’s cost before rebates or discounts are applied — not the price people actually pay for prescriptions.

Medicare spent $50 billion covering drugs last year and taxpayers are expected to save $6 billion from the new rates, which do not take effect until 2026. out of pocket expenses. Administration officials have released few details on how they arrived at those figures.

The new negotiated prices will affect the price of drugs used by millions of American adults to help manage diabetes, blood cancer and prevent heart failure or blood clots. The drugs include the blood thinners Xarelto and Eliquis and the diabetes drugs Jardiance and Januvia.

It is a landmark agreement for the Medicare program, which provides health care to more than 67 million elderly and disabled Americans. For decades, the federal government has been prohibited from bargaining with pharmaceutical companies on the price of their drugs, although it is standard practice for private insurers.

“For years, millions of Americans have been forced to choose between paying for medicine or putting food on the table, while Big Pharma has prevented Medicare from negotiating prices on behalf of seniors and people with disabilities,” President Joe Biden said in a statement. . “But we fought — and we won.”

Drug deals will be a focus of Vice President Kamala Harris’ presidential campaign, especially since she voted to pass the law. He will join Biden on Thursday to announce drug prices, which will be the first time they have spoken together since he took over at the top of the Democratic ticket, as both struggle to convince voters that costs will fall after years of above-average inflation.

Harris will roll out part of his economic agenda Friday in North Carolina, where he plans to outline other ways to help cut costs and increase incomes for the middle class.

The pair made their last public appearance together to welcome Americans imprisoned in Russia who were released as part of a prisoner exchange earlier this month.

Powerful drug companies unsuccessfully tried to file lawsuits to stop the negotiations, which became law in 2022, when the Democratic-controlled Congress passed the Inflation Reduction Act (IRA), amending several Medicare drug laws. But executives at those companies have also said in recent weeks during earnings calls that they don’t expect the talks to have an impact on their bottom line.

Pharmaceutical officials blasted the news from the White House, saying it would spread the cost of health care to taxpayers through other means, including their Medicare payments.

“Administrators use the IRA pricing system to advance political agendas, but patients will be disappointed when they find out what they mean to them,” said Steve Ubl, president of the Pharmaceutical Research and Manufacturers of America (PhRMA). “The Inflation Reduction Act is a terrible act being forced on American patients: higher costs, frustrating insurance denials and fewer treatments and treatments for our loved ones.”

Next year, the Department of Health and Human Services may select 15 more drugs for price negotiations.

-Amanda Seitz and Zeke Miller, Associated Press