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Medicare drug price negotiations: 10 list prices drop between 38% to 79%

By: Beth Mole
15 August 2024 at 21:40
Prescription drugs are displayed at NYC Discount Pharmacy in Manhattan on July 23, 2024.

Enlarge / Prescription drugs are displayed at NYC Discount Pharmacy in Manhattan on July 23, 2024. (credit: Getty | Spencer Platt)

In the first round of direct price negotiations between Medicare and drug manufacturers, prices for 10 expensive and commonly used drugs saw price cuts between 38 percent to 79 percent compared to their 2023 list prices, the White House and the US Department of Health and Human Services (HHS) announced Thursday. The new negotiated prices will take effect on January 1, 2026.

The 10 drugs that were up for negotiations are used to treat various conditions, from diabetes, psoriasis, blood clots, heart failure, and chronic kidney disease to blood cancers. About 9 million people with Medicare use at least one of the drugs on the list. In 2023, the 10 drugs accounted for $56.2 billion in total Medicare spending, or about 20 percent of total gross spending by Medicare Part D prescription drug coverage. But in 2018, spending on the 10 drugs was just about $20 billion, increasing to 46 billion in 2022β€”a 134 percent rise. In 2022, Medicare enrollees collectively paid $3.4 billion in out-of-pocket costs for these drugs.

For now, it's unclear how much the newly set prices will actually save those who have Medicare enrollees in 2026. Overall costs and out-of-pocket costs will depend on each member's coverage plans and other drug spending. Additionally, in 2025, Medicare Part D enrollees will have their out-of-pocket drug costs capped at $2,000, which alone could significantly lower costs for some beneficiaries before the negotiated prices take effect.

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Big Pharma’s fight against drug price reforms takes weird, desperate turn

By: Beth Mole
27 June 2024 at 20:29
Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America (PhRMA), speaks during a Bloomberg Live discussion in Washington, DC, in 2017.

Enlarge / Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America (PhRMA), speaks during a Bloomberg Live discussion in Washington, DC, in 2017. (credit: Getty | Andrew Harrer)

After a series of decisive court losses, the pharmaceutical industry appears to be taking its fight against Medicare drug price negotiations directly to the peopleβ€”and the White House is not impressed.

This week, the high-powered industry group PhRMA (the Pharmaceutical Research and Manufacturers of America) released two eye-catching attacks on federal efforts to lower America's singularly astronomical drug prices. In a press release Tuesday, PhRMA announced an analysis suggesting that the Medicare drug price negotiationsβ€”part of the Biden administration's 2022 Inflation Reduction Actβ€”could actually cost some seniors and people with disabilities slightly more in out-of-pocket costs. The analysis, however, relies on a keyβ€”and questionableβ€”assumption that the federal government will set price limits using the highest possible estimate for maximum fair prices in 2026.

Milliman, the consulting firm PhRMA commissioned to do the study, cautioned that the actual prices "will certainly vary due to differences in unit cost and utilization trend, 2026 benefit designs, and actual 2026 maximum fair prices."

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