Negotiations Begin for Lower Drug Prices on 10 Critical Medications for Medicare Patients

WASHINGTON, D.C. – In an effort to address the rising costs of prescription drugs for elderly Americans, the Biden administration presented offers to pharmaceutical companies for 10 widely used medications on Thursday. This marks the beginning of negotiations over drug prices for Medicare, as the Department of Health and Human Services seeks to make essential medications more affordable for seniors.

The selected drugs include a variety of treatments for conditions such as heart failure, stroke, diabetes, and autoimmune disease, including Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and the insulins Fiasp and NovoLog. The administration’s initial offers will kickstart discussions with drug manufacturers over the coming months, with final prices set to be made public on Sept. 1 and take effect in January 2026.

The initiative, part of President Biden’s Inflation Reduction Act, will see an additional 30 drugs selected over the next two years for negotiated prices to be implemented in 2027 and 2028. Health and Human Services Secretary, Xavier Becerra, lauded the move as a “new era in Medicare,” granting the federal health program the power to negotiate drug prices.

Pharmaceutical companies and their allies have challenged the federal law in court, filing nine lawsuits against various aspects of the legislation. However, their legal efforts have not managed to impede the administration’s attempts to secure cost savings for consumers.

The medications chosen for negotiation have been on the market for years without generic alternatives and accounted for roughly 20% of total spending for Medicare Part D prescription drugs over the past year, totaling about $50.5 billion in costs to Medicare and enrollees. The Congressional Budget Office projects that these negotiations will save the federal health program $98.5 billion over the next decade.

While the negotiated prices won’t be reflected in consumer costs until 2026, other provisions of the Inflation Reduction Act have already resulted in savings, such as free vaccines for Medicare enrollees and a $35 monthly cap for covered insulin products. Additionally, the law will limit out-of-pocket expenses for prescription drugs to $2,000 a year starting in 2025 for Medicare’s Part D drug plans.