Medicare, the health insurance program for people over 65 years old, said it will start negotiating prices on 10 drugs, part of its mandate under the Inflation Reduction Act to lower prescription prices for older Americans.
The first drugs under price negotiations include diabetes medication Jardiance, insulin such as the NovoLog FlexPen and the heart medication Entresto, according to a statement by the U.S. Department of Health and Human Services.
The negotiations mark the first time Medicare has been able to haggle over drug prices for its 65 million enrollees. They come at a time when 1 in 5 seniors say they arebecause of the cost of their medications. While the negotiations are expected to lower drug costs for Medicare enrollees, the effort faces litigation from drugmakers and heavy criticism from Republican lawmakers.
AARP, the advocacy group for older Americans, called the negotiations “monumental.”
“The No. 1 reason seniors skip or ration their prescriptions is because they can’t afford them. This must stop,” AARP executive vice president Nancy LeaMond said in a statement. “Allowing Medicare to negotiate prices for these first 10 drugs will finally bring much-needed access and relief to American families, particularly older adults.”
The 10 drugs under negotiation
Medicare’s first drug price negotiations will focus on insulin, blood thinners and more. The drugs are:
- Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill
How much could seniors save on medications?
According to the Biden administration, seniors spent $3.4 billion in out-of-pocket costs for these medications in 2022. In all, Medicare spent about $50.5 billion on these 10 medications, or 20% of its Part D prescription drug costs, between June 1, 2022 and May 31, 2023, the Biden adminsitration said.
The negotiations, as well as other pricing mechanisms authorized by the Inflation Reduction Act, could save taxpayers $160 billion by cutting Medicare’s spending on drugs, President Joe Biden said in a statement released Tuesday.
“When implemented, prices on negotiated drugs will decrease for up to 9 million seniors,” Biden added.
When would lower prices become effective?
The agreed-upon negotiated prices would be published by Sept. 1, 2024.
But the negotiated prices for these drugs wouldn’t go into effect until Jan. 1, 2026, the Biden administration said.
Will Medicare negotiate prices on additional drugs?
Yes, the Biden administration said it will select up to 15 more drugs covered under part D for 2027, and another 15 drugs for 2028, with the latter including drugs covered under both Part B and Part D.
In subsequent years, 20 additional drugs will be picked for negotiations annually.
Part B covers doctor’s visits and some outpatient drugs that must be administered in a medical office. Part D is the broader coverage for prescriptions.
With reporting by the Associated Press.