White House settles Medicare drug price negotiations

The White House has reached agreement on new prices for 10 drugs selected for Medicare drug price negotiations, a move that could have saved the federal program $6 billion if it'd been in effect over the past year, the administration said in a CMS press release.

Overall, the newly negotiated drug prices range from 38% to 79% discounts off the list prices of 10 commonly prescribed medications.

"Americans pay too much for their prescription drugs. That makes today's announcement historic," Xavier Becerra, HHS secretary, stated publicly. "For the first time ever, Medicare negotiated directly with drug companies and the American people are better off for it."

The 10 drugs whose list prices were negotiated down include the following:

• Eliquis.
• Jardiance.
• Xarelto.
• Januvia.
• Farxiga.
• Entresto.
• Enbrel.
• Imbruvica.
• Stelara.
• Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill.

These medications treat a range of common chronic illnesses including diabetes, heart disease, kidney disease, blood cancers, ulcerative colitis, and psoriasis. They accounted for $56.2 billion in total Medicare spending in 2023, or around 20% of total Part D gross spending.

The drug price negotiations were enabled by the Inflation Reduction Act, signed into law in August of 2022. According to Congressional Budget Office (CBO) analysis, these renegotiated prices are slated to save the nation billions.

Over the 10 years following this first round of drug price negotiations, CBO estimated the U.S. will see around $100 billion in savings, and $3.7 billion in the first year after renegotiations alone. For people who pay for their medications out of pocket, their costs will shrink by around $1.5 billion cumulatively, CMS said.

Medicare drug price negotiations are a big deal because they are a first step in tamping down on ballooning prescription drug costs, CMS indicated.

"Empowering Medicare to negotiate prices not only strengthens the program for generations to come, but also puts a check on skyrocketing drug prices," Becerra stated.

For example, total Part D gross spending for the 10 renegotiated drugs increased by 134% between 2018 and 2022, from around $20 billion to $46 billion. That shakes out to $3.4 billion in out-of-pocket costs for Medicare beneficiaries in 2022, CMS said.

"Medicare drug price negotiation and the lower prices announced today demonstrate the commitment of CMS and the Biden-Harris Administration to lower health care and prescription drug costs for Americans," Chiquita Brooks-LaSure, CMS administrator, said in a press release. "We made a promise to the American people, and today, we are thrilled to share that we have fulfilled that promise."

CMS said it plans to select up to 15 more drugs covered under Medicare Part D to renegotiated for 2027. The agency will announce those medications by Feb. 1, 2025. It will also select up to 15 more drugs covered by Medicare Part B or Part D for 2028, and up to 20 more drugs for each year after that.

Sara Heath has covered news related to patient engagement and health equity since 2015.