Medicare to Begin Negotiating Prices for a Range of Pharmaceuticals

Medicare, the healthcare program designed for individuals aged 65 and above, has announced its plans to initiate price negotiations for a selection of medications. This step aligns with the Inflation Reduction Act's objective of reducing prescription costs for older Americans. Among the first set of drugs slated for price negotiations are Jardiance, a diabetes medication, NovoLog FlexPen insulin, and Entresto, a heart medication, according to a statement issued by the U.S. Department of Health and Human Services. This marks the first opportunity for Medicare to engage in bargaining over drug prices for its immense pool of 65 million beneficiaries. The timing is particularly significant, as one out of every five seniors admits to skipping doses due to the steep cost of medications. Although the negotiations are expected to alleviate the financial burden on Medicare enrollees, they face legal challenges from pharmaceutical companies as well as staunch criticism from Republican lawmakers. AARP, an advocacy group for older Americans, has hailed the negotiations as a "monumental" step. Executive Vice President Nancy LeaMond asserted that the primary reason seniors ration or forego their prescriptions is due to affordability concerns. She emphasized the pressing need to address this issue by allowing Medicare to negotiate drug prices for the initial set of ten drugs, which will bring substantial relief to American families, especially older adults. The ten drugs included in the negotiations span several categories with a focus on insulin, blood thinners, and more. These medications are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp. In 2022, seniors incurred approximately $3.4 billion in out-of-pocket expenses for these drugs, while Medicare spent around $50.5 billion for the same medications, accounting for 20% of its Part D prescription drug costs between June 2022 and May 2023, according to the Biden administration. In addition to potential savings for taxpayers, President Joe Biden stated that these negotiations and other pricing mechanisms authorized by the Inflation Reduction Act could save Medicare $160 billion in drug expenditures. The administration estimated that up to 9 million seniors would benefit from lower prices once implemented. The agreed-upon prices resulting from negotiations will be published by September 1, 2024, but will not take effect until January 1, 2026. Furthermore, Medicare plans to extend its price negotiations to include an additional 15 drugs under Part D coverage in 2027, followed by another 15 in 2028. Subsequently, every year, 20 more drugs will be chosen for negotiations, with a combination of Part B and Part D coverage. Part B specifically covers doctor's visits and certain outpatient drugs that necessitate administration in a medical setting. Part D offers broader coverage for prescription medications. Please note that this notice is sourced from various news outlets.