The Biden administration recently announced successful negotiations with pharmaceutical companies to reduce the cost of ten of Medicare’s most essential and expensive drugs, though specific details about the new prices were not immediately disclosed. White House officials revealed that U.S. taxpayers are projected to save $6 billion under the new prices, while older Americans may save around $1.5 billion on their medications; however, the methodology behind these estimates was not provided.
The revised prices will affect medications commonly used by millions of older Americans to manage diabetes, blood cancers, as well as prevent heart failure and blood clots. Among the drugs impacted are Xarelto and Eliquis for blood thinning and diabetes medications like Jardiance and Januvia. Medicare’s spending on these drugs amounted to $50 billion last year.
This development marks a significant milestone for the Medicare program, which caters to over 67 million elderly and disabled Americans. Historically, the federal government was prohibited from negotiating drug prices with pharmaceutical companies, unlike private insurers. The new drug deals, a result of the Inflation Reduction Act passed in 2022, will be instrumental in reducing healthcare costs for Americans.
Vice President Kamala Harris, who played a pivotal role in passing the law, is anticipated to emphasize the importance of these drug price reductions in her upcoming presidential campaign. The finalized drug prices are slated to be disclosed by the Centers for Medicare and Medicaid Services, with implementation scheduled for 2026. The government estimates that negotiations could lead to saving $25 billion by 2031.
The announcement of the drug deals comes ahead of Harris unveiling part of her economic agenda in North Carolina, where she intends to introduce additional measures to alleviate financial burdens and enhance incomes for the middle class.
