Medicare Enrollees Will See Significant Price Reductions For 10 Drugs

The White House and select drug manufacturers have agreed on cost cuts for 10 widely prescribed medications for Medicare enrollees.

The United States Department of Health and Human Services negotiated a 38% to 79% price cut on 10 drugs for Medicare Part D enrollees, the White House said Thursday. Medicare enrollees will save $1.5 billion in out-of-pocket costs in 2026 under the new prices that were a part of President Joe Biden’s Inflation Reduction Act (IRA) initiatives.

The IRA allowed Medicare, the federal health insurance program for older Americans or those with a disability, to negotiate prices of drugs with participating drug makers. Last year, the federal government began price negotiations with participating drug makers under the IRA.

Price Cuts Weren’t Guaranteed

The negotiations were met with opposition from multiple large pharmaceutical firms such as Johnson & Johnson (JNJ), Bristol-Myers Squibb (BMY) and Merck (MRK), as well as the Pharmaceutical Research and Manufacturers of America (PhRMA), lobbyists for the pharmaceutical industry.

These drugmakers sued, saying the negotiation process was unfair. Merck argued the process is less like a negotiation and more like a “gun to the head.” So far, all court decisions have ruled in favor of the federal government and allowed the government to continue negotiations.

The 10 drugs with reduced costs include medicines that help care for life-threatening conditions such as diabetes, heart failure and cancer. 

Prices for up to 15 more drugs covered by Medicare Part D will be negotiated in 2025, the White House said.