WASHINGTON, DC – August 15, 2024 – On August 15th, the Biden administration announced the results of negotiations between the Centers for Medicare and Medicaid (CMS) and pharmaceutical companies over the price of ten expensive and commonly prescribed medicines. The discounts range from about 40 to 80% of last year’s cost. The bargaining process took almost 1 year to complete. The new prices will begin on January 1, 2026.
Drug cost negotiation is one of the provisions in the Inflation Reduction Act of 2022 (IRA) that will make health care more affordable for seniors. The government sought to obtain the lowest maximum fair price while allowing the drug companies to make a profit. The Inflation Reduction Act allows 30 more medicines to be selected over the next 2 years for price negotiation.
Drugs were selected from 2 categories. Each has either been on the market for at least 7 years without a competing generic version or is a physician-administered “biologic” drug that has been on the market for at least 11 years. The drugs are: Eliquis & Xarelto (blood thinners), Jardiance, Januvia and Novolog (for diabetes treatment), Farxiga (for the treatment of diabetes and heart failure), Entresto (for heart failure), Enbrel (for the treatment of autoimmune disease), Imbruvica (for the treatment of blood cancer) and Stelara (for psoriasis and other inflammatory disorders).
CMS estimates that people enrolled in Medicare prescription drug coverage can save $1.5 billion, taxpayers can save $6 billion, and drug coverage premiums will decrease.
The cost for these 10 drugs was about 20% of the total spending for Medicare enrollees over the past year, over $50 billion for the year between June 1, 2022, through May 31, 2023, not including rebates and discounts. Medicare covered most of the cost; however, almost 9 million Medicare beneficiaries had to spend almost $3.5 billion in out-of-pocket costs.
According to research from the Commonwealth Fund, almost 1 out of 10 Medicare enrollees ages 65 and older did not fill their prescription or skipped taking a drug dose due to cost in 2021. In a statement last year by President Biden, “Millions of Americans are forced to choose between paying for medicines they need to live or paying for food, rent, and other basic necessities. Those days are ending.”
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Contact: Dr. Dick Needleman, Health reporter, 103.3 AshevilleFM, healthyasheville@ashevillefm.org