FACT SHEET: How Medicare’s New Drug Price Negotiation Power Will Advance Health Equity

On August 29, the Biden administration announced the first round of high-cost drugs whose prices will come down as Medicare negotiates with the drug companies – a new power they have under 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 diabetes, heart failure, blood clots, and autoimmune disorders – conditions that disproportionately impact women, communities of color, and people in rural areas. The Inflation Reduction Act was championed by President Biden and Democrats in Congress to lower health care costs for people across the nation. 

The first ten drugs selected for negotiation are taken by nearly 9 million people on Medicare and account for about 20 percent of annual Medicare Part D spending. CMS will negotiate lower prices with manufacturers of these drugs, and those prices will take effect in 2026. The drugs are:

1. Eliquis which is manufactured by Bristol Myers Squibb and Pfizer to treat blood clots
2. Enbrel which is manufactured by Amgen to treat rheumatoid arthritis, psoriasis, and psoriatic arthritis
3. Entresto which is manufactured by Novartis to treat heart failure 
4. Farxiga which is manufactured by AstraZeneca to treat diabetes, heart failure, and kidney disease
5. Fiasp, also known as NovoLog, which is manufactured by Novo Nordisk to treat diabetes
6. Imbruvica which is manufactured by AbbVie and Johnson & Johnson to treat leukemia and lymphoma 
7. Januvia which is manufactured by Merck to treat diabetes
8. Jardiance which is manufactured by Boehringer Ingelheim and Eli Lilly to treat diabetes
9. Stelara which is manufactured by Johnson & Johnson to treat psoriasis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis
10. Xarelto which is manufactured by Johnson & Johnson’s Janssen Pharmaceuticals and Bayer to treat blood clots

The Medicare Drug Price Negotiation Program advances health equity in two key ways: 

First, the Negotiation Program will lower drug prices for certain high-cost drugs, which will reduce out-of-pocket costs for Medicare enrollees. Since Black, Latino, women, LGBTQI+, and disabled people on Medicare are more likely to have lower incomes and less savings, reducing prescription drug costs will be especially impactful for their financial security and access to care. Lowering prices through negotiation is one of several ways the law reduces prescription drug costs for Medicare enrollees. Others include: capping monthly copays for insulin at $35, providing vaccines at no cost, limiting annual out-of-pocket spending in Part D to $2,000, which will save seniors with high drug costs over $400 per year, and making the Medicare Extra Help program available to more low-income seniors, reducing their premiums and copays for medication. 

Second, negotiating lower prices for the selected drugs will make drugs that are disproportionately needed by historically marginalized communities more affordable and accessible. The ten drugs selected by Medicare for lower negotiated prices treat a number of conditions that disproportionately impact people of color, and Medicare enrollees of color are more likely than the general Medicare population to take six of the ten selected drugs. Of the ten drugs selected by Medicare, eight treat conditions that disproportionately impact people of color including diabetes, heart failure, chronic kidney disease, blood clots, arthritis, and blood cancer (see Table 1). Additionally, six of the ten drugs are taken by a disproportionate number of Black, Latino, Asian, and/or American Indian/Alaska Native Medicare enrollees relative to the Medicare population as a whole (see Table 2), including

• Enbrel is taken by a higher percentage of Latino enrollees and American Indian/Alaska Native enrollees than their proportion of the Medicare population. 
• Entresto is taken by a higher percentage of Black enrollees than their proportion of the Medicare population. 
• Farxiga is taken by a higher percentage of Black enrollees, Latino enrollees, and Asian American enrollees than their proportion of the Medicare population.
• Fiasp/NovoLog is taken by a higher percentage of Black enrollees, Latino enrollees, and American Indian/Alaskan Native enrollees than their proportion of the Medicare population.
• Januvia is taken by a higher percentage of Black enrollees, Latino enrollees, and Asian American enrollees than their proportion of the Medicare population. 
• Jardiance is taken by a higher percentage of Black enrollees, Latino enrollees, Asian American enrollees, and American Indian/Alaskan Native enrollees than their proportion of the Medicare population.

Negotiating lower prices remains overwhelmingly popular among voters of all parties across the country. Unfortunately, big drug companies are suing the federal government to halt the program and protect their massive profits, and Republicans are attempting to repeal the Inflation Reduction Act in its entirety, placing these equity-advancing improvements at risk.

Table 1: Demographic Impact of Conditions Treated by Drugs Selected for Negotiation

Table 2: Drugs Selected for Negotiation Disproportionately Taken by Medicare Enrollees of Color

*the full drug name is Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill

Click here for a PDF of the tables and links.