Medicare drug talks yielded $6 billion in savings
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Medicare cut deals to lower the list prices of 10 widely used drugs between 38% and 79% during the first round of government price negotiations, the Biden administration said Thursday.
Why it matters: Officials said the first-ever talks will save taxpayers $6 billion. Seniors should save $1.5 billion in out-of-pocket costs when the price changes take effect in 2026.
The big picture: The announcement caps Democrats' decades-long push to let the government negotiate directly with manufacturers — and gives the White House a potent talking point as the presidential campaign crests.
- "For years, Big Pharma blocked Medicare from negotiating lower drug prices," President Biden said at a campaign event with Vice President Harris in Prince George's County, Md., on Thursday.
- "This time, we finally beat Big Pharma," the president added.
Between the lines: The negotiations involved the government exchanging offers and counteroffers with the manufacturers.
- For four of the drugs, Medicare wound up accepting a drug company's counteroffer. In five other cases, companies accepted the government's written final offer.
- The total estimated savings is based on the drugs' net prices, officials said. Patients typically pay less than a drug's list price due to rebates and discounts from drugmakers.
- Medicare isn't disclosing net prices, because that information is confidential to prescription drug insurance plans.
Here are the negotiated prices for a 30-day supply of the 10 drugs selected for the negotiations:
- Jardiance, Boehringer Ingelheim's diabetes drug: $197.00, a 66% discount from the 2023 list price.
- Januvia, a diabetes drug from Merck: $113.00, a 79% discount.
- Farxiga, AstraZeneca's diabetes drug: $178.50, a 68% discount.
- Entresto, a Novartis heart drug: $295.00, a 53% discount.
- Enbrel, an arthritis and psoriasis drug from Immunex: $2,355.00, a 67% discount.
- Imbruvica, a blood cancer drug from Pharmacyclics: $9,319.00, a 38% discount.
- Stelara, a J&J/Janssen drug for psoriasis, Crohn's disease and other illnesses: $4,695.00, a 66% discount.
- Fiasp, also used for diabetes and made by Novo Nordisk: $119.00, a 76% discount.
- Eliquis, a blood thinner from Bristol Myers Squibb: $231.00, a 56% discount.
- Xarelto, J&J/Janssen's blood thinner: $197.00, a 62% discount.
What they're saying: "For years, Big Pharma has often inflated the price of life saving medications," Harris said in Maryland on Thursday. "Millions of Americans have suffered as a result."
- Biden said, "It isn't just about health care," while touting the price talks. "It's about your dignity, about peace of mind, about security."
The other side: "There are no assurances patients will see lower out-of-pocket costs because the law did nothing to rein in abuses by insurance companies and PBMs who ultimately decide what medicines are covered and what patients pay at the pharmacy," Steve Ubl, CEO of the drug industry trade group PhRMA, said in a statement.
- Bristol Myers Squibb said in a statement Thursday morning that the final price of Eliquis "does not reflect the substantial clinical and economic value of this essential medicine."
- Drugmakers have maintained that the negotiation process is unconstitutional and amounts to the government price-setting. But a series of legal challenges aimed at scuttling the talks has so far been unsuccessful.
- Drugmakers had the choice to opt out of negotiations but would have faced steep penalties. All manufacturers of the drugs selected for the first round of negotiations participated.
CMS will use a review process to ensure that seniors can access the drugs subject to negotiations, the agency said.
What's next: Medicare administrators will select another 15 drugs for the next round of price talks by Feb. 1. Those negotiated prices would take effect in 2027.
Editor's note: This story has been updated with additional statements.
