The Department of Health and Human Services announced on Thursday the first round of negotiated medicine prices for the 10 most expensive drugs covered by Medicare .
"Americans pay too much for their prescription drugs. That makes today’s announcement historic,” HHS Secretary Xavier Becerra said in a press statement on Thursday. “For the first time ever, Medicare negotiated directly with drug companies and the American people are better off for it.”
The negotiation scheme was a key provision of President Joe Biden ’s 2022 Inflation Reduction Act, allowing the Centers for Medicare and Medicaid Services to negotiate lower prices for prescriptions with pharmaceutical companies directly.
The prices for the selected 10 drugs will take effect in January 2026, and another 15 will be selected by next February for negotiation on prices to take effect in 2027.
In this round, the diabetes medication Januvia from Merck faced the highest price reduction, 79%, bringing the monthly cost down to $113 from $573.
Other decreases include 76% for Novo Nordisk diabetes medication, 56% for blood clot prevention drug Eliquis, and 66% for Crohn’s disease medication Stelara.
Critics of the program, including patient advocacy groups and pharmaceutical investors, argue the provisions of the Inflation Reduction Act are not actually negotiations but rather strong-arm measures that require companies to capitulate to government-set prices, since Medicare is the largest prescription drug purchaser in the United States. Drugmakers face punitive taxation if they do not negotiate.
The Congressional Budget Office estimates the negotiations will save nearly $100 billion by 2031.
For now, the medications selected are those included in Medicare Part D, which covers prescriptions taken at home. But for the 2028 cycle, infusion drugs administered in a hospital covered by Medicare Part B would also be included in the negotiations.
Over time, the program will be expanded to include negotiations for up to 20 of the most expensive drugs for Medicare.
“It’s a relief for the millions of seniors that take these drugs,” Biden said on Thursday. “And it’s a relief for American taxpayers.”
Biden and Vice President Kamala Harris are slated to speak on Thursday afternoon about the measure in their first joint event since Biden announced he would no longer seek reelection in 2024.
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Last month, Biden and Sen. Bernie Sanders (I-VT) co-authored an opinion piece in USA Today that signaled legislation in the works to expand the negotiation program to 50 drugs per year. The article also alluded to the duo’s desire to set prices beyond Medicare.
“At a time when many Americans are dealing with the myriads of chronic illnesses, no one in our country should be forced to pay over $2,000 a year for the prescription drugs they need, not just seniors,” Sanders and Biden wrote.
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