WASHINGTON (TNS) — The Biden administration on Thursday began the first-ever negotiations over the price of 10 drugs in an effort to lower Medicare costs for the government and more than 450,000 Pennsylvanians with diabetes, cancer and other ailments.
Administration officials said they expected their initial offer to be countered by the pharmaceutical companies that make the drugs on the list, and both sides eventually will come to a fair price by the end of August.
The new prices would take effect in January 2026. The lower prices are expected to save Medicare $100 billion over 10 years, officials said.
“A new era in Medicare has begun,” said Xavier Becerra, secretary of the U.S. Department of Health and Human Services, on a conference call with reporters.
Administration officials said the lower prices will avoid Americans having to choose between buying food or the prescription drugs.
“There are families throughout America who make sacrifices to afford their medications,” Becerra said.
The Medicare drug price negotiations were part of President Joe Biden’s climate change and health care law, passed over unanimous Republican opposition. The legislation also capped the price of insulin at $35 a month and of out-of-pocket drug costs at $2,000 a year for Medicare recipients.
The drug companies’ trade group, Pharmaceutical Research and Manufacturers of America, has gone to court to overturn the law. The industry contributes $82.7 billion to Pennsylvania’s economy and supports more than 271,000 jobs, according to Phrma.
“This continues to be an exercise to win political points on the campaign trail rather than do what’s in the best interest of patients,” said Alex Schriver, Phrma’s senior vice president of public affairs. “Government bureaucrats are operating behind closed doors to set medicine prices without disclosing for months how they arrived at the price or how much patient and provider input was used. This lack of transparency and unchecked authority will have lasting consequences for patients long after this administration is gone.”
The 10 drugs now subject to negotiation cost the federal government $46.5 billion in 2022, with Medicare recipients paying another $3.4 billion in out of pocket costs, according to the Office of the Assistant Secretary for Planning and Evaluation.
They are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and NovoLog. They are used to treat diabetes, blood clots, heart failure, psoriasis, rheumatoid arthritis, Crohn’s disease, and blood cancers, according to KFF.
While the Department of Veterans Affairs long has been able to negotiate the price of drugs it buys, congressional Republicans refused to allow Medicare to do the same when they added a prescription drug component, known as Part D, to the health care program for the elderly.
“This is the very first time ever that Medicare isn’t just taking whatever price the drug companies ask for,” said Neera Tanden, domestic policy adviser for the Biden administration. “It is a huge step and it’s been a long time coming. We are very much on our way to lower costs.”
The price negotiations, the caps on insulin prices and out-of- pocket spending for prescription drugs, limits on how much drug companies can raise prices, and other provisions of the law will allow about 830,000 Pennsylvanians to save an average of $467 per year, according to HHS.
Passage of the law marked a rare defeat for the drug companies, which spent more than any other industry on lobbying last year — $378.6 million — according to the research group OpenSecrets.
