The Biden administration announced Thursday that it has signed deals with drug companies in an effort to lower costs on 10 drugs used by older adults that are among the most popular — and most pricey.
Officials say the move should save taxpayers $6 billion, and save older adults using Medicare about $1.5 billion collectively, according to a news release from the US Centers for Medicare and Medicaid Services (CMS).
In August 2023, the US Department of Health and Human Services announced the first 10 drugs covered under Medicare Part D that were selected for the first cycle of negotiations.
Drugs that are part of the deal include Xarelto, Eliquis, Jardiance, Januvia, Stelara, Farxiga, Enbrel, Fiasp, Entresto, and Imbruvica.
By February next year, CMS will select up to 15 more drugs covered under Part D for negotiation for 2027. The agency will pick 15 additional drugs covered by Part B or Part D for 2028, and up to 20 more Part B or Part D drugs for each year after that, as required by the Inflation Reduction Act.
The federal government credits the Inflation Reduction Act for enabling it to negotiate drug prices with pharmaceutical companies the same way that insurers do.
“CMS is proud to have negotiated drug prices for people with Medicare for the first time. These negotiations will not only lower the prices of critically important medications for cancer, diabetes, heart failure, and more, but will also save billions of dollars,” Chiquita Brooks-LaSure, the administrator of CMS, said in a statement.
Americans will have to wait for the lower prices, though, as they won’t be available until 2026.
AARP called the CMS action a “significant step forward,” but others weren’t happy with the development.
“The administration is using the [Inflation Reduction Act’s] price-setting scheme to drive political headlines, but patients will be disappointed when they find out what it means for them,” Steve Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), said in a statement released Wednesday that was reported in a HealthDay article.
“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 [pharmacy benefit managers] who ultimately decide what medicines are covered and what patients pay at the pharmacy,” Ubl said.
Due to the act, patients have fewer Part D plans to choose from and premiums are going up, Ubl added.
“Meanwhile, insurers and PBMs are covering fewer medicines and say they intend to impose further coverage restrictions as the price-setting scheme is implemented,” Ubl noted.
