White House Announces First 10 Drugs Subject to Medicare Price Negotiations
September 26, 2023
On Tuesday, Aug. 29, the Biden administration unveiled the first 10 prescription drugs subject to Medicare price negotiations. Medicare provides health insurance coverage to 65 million Americans, including 57 million seniors.
More than 60% of the 65 million people on Medicare take prescription medication, and 25% take at least four prescriptions, according to a Kaiser Family Foundation survey.
Under the Inflation Reduction Act, the Medicare Drug Price Negotiation Program allows the federal government to negotiate directly with drug manufacturers to improve access to some of the costliest brand-name drugs. Many Medicare Part D enrollees depend on medications to treat life-threatening conditions, such as diabetes and heart failure, but may not be able to access them due to costs. The following Medicare Part D drugs will be the first ones subject to these negotiations:
- Eliquis, for preventing and treating blood clots
- Jardiance, for treating diabetes and heart failure
- Xarelto, for preventing and treating blood clots; risk reduction for patients with coronary or peripheral artery disease
- Januvia, for treating diabetes
- Farxiga, for treating diabetes, heart failure and chronic kidney disease
- Entresto, for treating heart failure
- Enbrel, for treating rheumatoid arthritis, psoriasis and psoriatic arthritis
- Imbruvica, for treating blood cancers
- Stelara, for treating psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis
- Fiasp/Novolog, for treating diabetes
These 10 drugs are among the highest costs in total spending in Medicare Part D. In fact, Medicare enrollees taking these drugs paid a collective $3.4 billion in out-of-pocket costs in 2022 to obtain them. Due to the high costs of these prescriptions, many Americans are forced to choose between paying for vital medications or food and other necessities.
What’s Next?
The Medicare Drug Price Negotiation Program is the Biden administration’s latest effort to combat rising health care costs. As such, Medicare drug price negotiation aims to lower out-of-pocket costs for millions of seniors and offer savings for taxpayers.
The first round of Medicare Part D drug negotiations will begin this year, with the new prices becoming effective in 2026. Over the next four years, Medicare plans to negotiate prices for up to 60 Part D and Part B drugs—and up to an additional 20 drugs every year after that.
Employers should continue to monitor health care trends, utilization and spending. Contact us today for more information.
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