Today, the Biden administration announced the first round of high-cost drugs whose prices will come down as Medicare negotiates with the drug companies thanks to the Inflation Reduction Act. This new program will lower prices for some of the highest-priced prescription drugs on the market used to treat conditions like cancer, blood clots, diabetes, and autoimmune disorders – conditions that disproportionately impact women, communities of color, and people in rural areas. Coverage confirms that President Biden’s Inflation Reduction Act is bringing down drug costs and saving seniors and taxpayers billions of dollars. Negotiating lower prices is overwhelmingly popular across the country, yet big drug companies are suing the federal government to protect their massive profits by halting the program while Republicans are attempting to repeal it. Read more about the first 10 drugs here.
New York Times: Biden Administration Announces First Round of Drugs Up for Price Negotiation. “The negotiation program is projected to save the government an estimated $98.5 billion over a decade. It is also expected to eventually reduce insurance premiums and out-of-pocket costs for many older Americans, though the magnitude of those savings remains to be seen. Polling by KFF, a health policy research organization, has found broad, bipartisan public support for allowing Medicare to negotiate prices. In a survey late last year, 89 percent of Democrats and 77 percent of Republicans said they favored the plank of the Inflation Reduction Act that authorizes negotiations. “There are very few issues in American politics that are popular no matter where you live or what your political party is,” said Leslie Dach, a longtime Democratic strategist and the chairman of Protect Our Care, a health care advocacy group.” [New York Times, 8/29/23]
ABC: Biden Administration Names 10 Prescription Drugs for First-Ever Medicare Price Negotiations. “The Biden administration on Tuesday unveiled the first 10 prescription drugs that will be subject to price negotiations with Medicare, marking a milestone for Democrats in their yearslong push to lower rising health care costs. […] President Joe Biden, in a statement, said the medications are “among the most common and costly prescriptions that treat everything from heart failure, blood clots, diabetes, arthritis, Crohn’s disease — and more.For far too long, Americans have paid more for prescription drugs than any major economy. And while the pharmaceutical industry makes record profits, millions of Americans are forced to choose between paying for medications they need to live or paying for food, rent, and other basic necessities,” Biden said. “Those days are ending.”” [ABC, 8/29/23]
AP: Biden Administration Targets Diabetes Drug in Their Price Negotiation Announcement. “The administration on Tuesday released a list of the 10 drugs for which prices will be negotiated directly with the manufacturer. The move is expected to cut costs for many patients, but it faces litigation from the drugmakers and heavy criticism from Republican lawmakers, and it could be years before consumers notice any savings. […] More than 52 million people who either are 65 or older or have certain severe disabilities or illnesses get prescription drug coverage through Medicare’s Part D program, according to CMS. About 9% of Medicare beneficiaries age 65 and older said in 2021 that they did not fill a prescription or skipped a drug dose due to cost, according to research by the Commonwealth Fund, which studies health care issues.” [AP, 8/29/23]
Axios: Biden Administration Picks the First Ten Drugs Up for Medicare Price Negotiation. “The administration’s landmark announcement Tuesday detailed the first-ever set of drugs subject to Medicare price negotiations, a longtime Democratic priority included in last year’s Inflation Reduction Act over drug companies’ fervent objections. The drugs’ manufacturers will have just over a month to decide whether to participate in negotiations — which the industry is battling in court — or sit out the process, at the risk of significant financial penalty.” [Axios, 8/29/23]
CNN: List of the First Ten Drugs Subject to Medicare Price Negotiations. “The medications treat heart disease, certain cancers, diabetes and autoimmune diseases. Some 9 million Medicare enrollees took the medications on the list and paid a total of $3.4 billion in out-of-pocket costs last year, according to the Department of Health and Human Services. Those who didn’t receive additional financial assistance shelled out as much as $6,500 on average. ” [CNN, 8/29/23]
The Hill: Timeline for Medicare Price Negotiation on the 10 Drugs Announced Today. “These single-source drugs were chosen based on their eligibility under the IRA and are the ‘highest total Part D gross covered prescription drug costs’ under Medicare Part D, according to the CMS. In total, these medications account for $50.5 billion in total gross Part D costs. Negotiations over these drugs, if manufacturers agree to the process, will take place over 2023 and 2024. Drugmakers have until Oct. 1 to sign agreements. The CMS will publish the “maximum fair prices” for these drugs in September 2024. The negotiated prices for these drugs will go into effect beginning in 2026.” [The Hill, 8/29/23]
HuffPost: White House Eager For Prescription Drug Fight Ahead Of 2024. “In a new memo, released just hours after the federal government named the first 10 drugs set to be subject to price negotiations, administration officials made clear they hope to continue driving at the difference between Biden and congressional Republicans on the issue. […] “This fight is far from over. President Biden is pushing to expand Medicare’s capacity to negotiate lower drug costs, which he released a concrete plan for in his budget,” White House deputy press secretary Andrew Bates wrote in the new memo. “[C]ongressional Republicans continue to side with Big Pharma’s price gouging and cuts to Medicare benefits instead.”” [HuffPost, 8/29/23]
NBC News: Medicare Names First 10 Drugs Up for Price Negotiations With the Government. “The Centers for Medicare and Medicaid Services on Tuesday announced the first 10 prescription drugs that will be subject to Medicare price negotiations under the Inflation Reduction Act, a critical step in the Biden administration’s attempt to drive down the high cost of prescription drugs for older people. Medicare provides health insurance coverage to 65 million people in the United States, according to KFF, a nonpartisan group that studies health policy issues. While the program wields enormous power over the costs of other aspects of medical care, dictating how much doctors and hospitals can be paid for medical services, it has been barred from negotiating drug costs.That will change next year, when Medicare for the first time will be able to directly haggle with drugmakers over prices for the costliest medications.” [NBC News, 8/29/23]
Politico: Analysis on Whether the New Medicare Price Negotiations Will Work. “If the law goes forward as prescribed, then the final negotiated price for the products won’t be reached until Sept. 1, 2024. However, Medicare patients will see some relief from drug prices before 2026. Starting in 2025, another provision in the Inflation Reduction Act will cap a beneficiary’s Medicare Part D out-of-pocket costs at $2,000 a year. CMS also installed a $35 cap for a monthly supply of insulin earlier this year. After the prices on the 10 drugs are finalized, standalone Part D and Medicare Advantage plans are required to put the drugs on their formularies at the negotiated rate. ” [Politico, 8/29/23]
Reuters: White House Announces First 10 Drugs for Price Negotiation. “[O]nce implemented, the prices on negotiated drugs will decrease for up to 9 million seniors who currently pay as much as $6,497 in out-of-pocket costs per year for these prescriptions. […]Shares of drugmakers were mostly flat in premarket trading. This kicks off the negotiation process for the 10 drugs whose new prices will go into effect in 2026. The program aims to save $25 billion per year on drug prices by 2031. Wells Fargo analyst Mohit Bansal said the savings made from negotiations on Jardiance, Januvia, Farxiga and Insulin Aspart, which cost the agency about $16.5 billion, could potentially free up CMS’s budget and make it easier to cover diabetes or obesity drugs.” [Reuters, 8/29/23]
Stat: U.S. Announces First Round of Drugs Up for Price Negotiation From Medicare. “The drugs were chosen from a list of 50 treatments that cost Medicare’s pharmacy drug benefit the most money. The selected medicines cost Medicare more than $50 billion and made up 20% of the Medicare program’s pharmacy drug costs over a one-year period, the Department of Health and Human Services said. […] “For far too long, pharmaceutical companies have made record profits while American families were saddled with record prices and unable to afford life-saving prescription drugs,” said HHS Secretary Xavier Becerra. “Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred.”” [Stat, 8/29/23]
Washington Post: Biden Administration Names 10 Prescription Drugs For Price Negotiations. “The Biden administration Tuesday identified 10 expensive prescription drugs that have been chosen for price negotiations with pharmaceutical manufacturers as the government seeks to ease the financial burden on older and disabled Americans. The announcement marks an unprecedented step in a long political war over the nation’s exorbitant drug costs even as the pharmaceutical industry is still trying to block the plan.” [Washington Post, 8/29/23]