Thursday the Biden administration is making the first offers in its drug price negotiation with manufacturers, which the White House says will help lower costs for people on Medicare.
The Inflation Reduction Act has given Medicare the ability to negotiate with drug companies directly through the Medicare Drug Price Negotiation Program. Its first step is to arrive at new prices for 10 of the priciest drugs that Medicare recipients may depend on to treat conditions like diabetes, arthritis or heart failure.
"Medicare is negotiating for lower prices on drugs to treat everything from diabetes, Crohn’s disease, arthritis, heart disease, cancer, and more," President Joe Biden said in a statement about the new negotiations. "Just one of these drugs alone can cost as much as $6,500 in out-of-pocket costs for seniors. Through my Inflation Reduction Act, we’re working to give seniors the best possible deal on their prescription drugs and lower health care costs."
HHS identified the drugs to negotiate on in August of 2023. Negotiations on the new prices will end by Aug. 1, 2024. If drug companies and the government agree on a maximum price for a drug, that price will take effect for Medicare recipients starting in 2026.
Starting this week, Americans will pay only $35 for insulin
Despite over 8 million Americans relying on insulin for survival, up to a quarter of these individuals have been unable to afford the medication.
From June 2022 to May 2023, more than 9 million Medicare enrollees were using these drugs. The new negotiations are expected to save them significant money.
In the same 2033-2023 time period, Medicare recipients spent more than $50 billion on the drugs being negotiated now, accounting for roughly 20% of gross prescription drug spending that went through Medicare.
It is a symptom of the nation's relatively high drug costs: Compared to every dollar spent on drug costs in OECD comparison countries, the U.S. pays $2.78.
On Thursday, the Department of Health and Human Services also launched LowerDrugCosts.gov, a website to help those on Medicare learn more about potential drug savings. Fact sheets, videos and other assets are available in multiple languages.
