NBC News
The government of Democrat Joe Biden announced on Thursday an agreement with drug manufacturers to reduce the prices of the 10 most expensive drugs in Medicare. This reduction, agreed after months of negotiations between the federal government and pharmaceutical companies, could ease the financial burden of nearly one in seven older adults who struggle to pay for their medicines.
These are the new negotiated prices for drugs based on a 30-day supply:
- Eliquis, a blood thinner made by pharmaceutical companies Bristol Myers Squibb and Pfizer, falls from $521 to $231.
- Xarelto, a blood thinner made by Johnson & Johnson, drops from $517 to $197.
- Merck’s diabetes drug Januvia drops to $113 from $527.
- Jardiance, a diabetes drug from Boehringer Ingelheim and Eli Lilly, drops to $197 from $573.
- Enbrel, Amgen’s rheumatoid arthritis drug, drops to $2,355 from $7,106.
- Imbruvica, a blood cancer drug from AbbVie and Johnson & Johnson, drops to $9,319 from $14,934.
- Farxiga, a drug for diabetes, heart failure and chronic kidney disease made by AstraZeneca, drops to $178 from $556.
- Novartis’s heart failure drug Entresto drops to $295 from $628.
- Johnson & Johnson’s psoriasis and Crohn’s disease drug Stelara drops to $4,695 from $13,836.
- Fiasp and NovoLog, two diabetes drugs from Novo Nordisk, drop from $495 to $119.
The new prices will not take effect until 2026, but the move marks a milestone for Medicare because the federal government has never before haggled directly with manufacturers over their prescription drugs.
“This is a historic moment,” White House adviser Neera Tanden said on a call with reporters Wednesday night. “Millions of seniors and other Medicare beneficiaries will soon see reduced drug costs for some of the most common and expensive drugs that treat heart disease, cancer, diabetes, and more.”
Medicare provides health coverage to more than 65 million people in the United States.
On Wednesday’s call, administration officials said the new prices are expected to save Medicare enrollees $1.5 billion in the first year, adding to savings from other policies such as capping insulin prices at $35 a month, and could total as much as $6 billion in spending cuts for public insurance.
The negotiations, spurred by the Inflation Reduction Act, began in January when Medicare submitted its initial pricing proposal to drugmakers.
Health Secretary Xavier Becerra described the negotiations as “intense.” “I had the privilege of working closely with our team to oversee them,” he said Wednesday, “it was necessary for both sides to reach a good agreement.”
In a statement, Steve Ubl, executive director of the US pharmaceutical industry, said the Biden administration was using the negotiations to “get political headlines” in the media. “There is no guarantee that patients will see their day-to-day expenses reduced,” he said, without explaining why.
The administration plans to use the negotiations to bolster Vice President Kamala Harris’s presidential campaign against Republican Donald Trump during a joint event with Biden.
Concern over high cost of drugs
A study published Wednesday in the journal JAMA found that more than half of older adults said they were very concerned about health care and prescription drug costs. Nearly nine in 10 people over 65 said they take at least one prescription drug, according to KFF, a nonprofit group that researches health issues.
An analysis by the Commonwealth Fund, a nonprofit health research institute, found that U.S. retail prices — what pharmacists charge patients or insurers before discounts or rebates — for the 10 drugs negotiated by Medicare were three to eight times higher than in other countries of similar size and wealth.
Together, the 10 selected drugs accounted for more than $50 billion of Medicare Part D spending from June 1, 2022, through May 31, 2023, or 20%.
Medicare beneficiaries spent $3.4 billion on those drugs in 2022, with the average spending for the most expensive ones reaching $6,497 per enrollee, according to the agency.
These 10 drugs are just the beginning
The 10 negotiated drugs are just the start: in 2027, negotiated prices will come into effect for 15 more drugs, followed by another 15 in 2028 and 20 more in each subsequent year. Seniors may save even more in the years to come.
The outcome could be jeopardized if drugmakers succeed in their so-far unsuccessful lawsuits to block the law.
“It is very important that an agreement was reached with all 10 manufacturers,” Stacie Dusetzina, a health policy professor at Vanderbilt University in Nashville, Tennessee, said in an email. “No one opted to leave Medicare and Medicaid in protest of the new prices. That is a success.”
The negotiations are limited to Medicare Part D drugs, which cover drugs used at home. However, in the coming years, Part B drugs, which are administered in medical facilities — such as chemotherapy drugs — will also be subject to negotiations.
