Administration Unveils First 10 Negotiated Drug Prices

WASHINGTON — The Biden administration on Thursday unveiled the results of the first-ever negotiations between Medicare and some of the world’s largest pharmaceutical companies.

The landmark price negotiations were set in motion with the passage, by a 220-207 party-line vote in the House, of the Inflation Reduction Act in 2022.

This first round of talks covers 10 expensive or commonly used medications taken by tens of millions of older Americans every day.

During a telephone briefing with reporters Wednesday night, an administration official said had the new prices been in effect last year, Medicare would have saved at least $6 billion.

“For years, millions of Americans were forced to choose between paying for medications or putting food on the table, while Big Pharma blocked Medicare from being able to negotiate prices on behalf of seniors and people with disabilities. But we fought back — and won,” President Joe Biden said in a statement released by the White House.

“When these lower prices go into effect, people on Medicare will save $1.5 billion in out-of-pocket costs for their prescription drugs and Medicare will save $6 billion in the first year alone,” he continued. “It’s a relief for the millions of seniors that take these drugs to treat everything from heart failure, blood clots, diabetes, arthritis, Crohn’s disease, and more — and it’s a relief for American taxpayers.”

Vice president and Democratic presidential nominee Kamala Harris also released a statement, describing the outcome of this first round of negotiated drug prices as “life-changing” for many Americans.

“Every American should be able to access the health care they need no matter their income or wealth,” Harris said.

“Additional prescription drugs will be selected each year as part of our Medicare drug price negotiation program. This includes up to 15 additional drugs covered under Medicare Part D for negotiation in 2025, up to an additional 15 Part B and Part D drugs in 2026, and up to 20 drugs every year after that,” she added.

Biden and Harris are expected to have much more to say on a drug pricing announcement later Thursday when they make their first joint appearance since he dropped out of the race for president and endorsed her.

The timing of that appearance at Prince George’s County Community College in Maryland, just days ahead of the start of the Democratic National Convention, underscores just how important the drug-pricing issue is seen as being to Harris’s presidential hopes.

Officials noted that it was Harris who cast the tie-breaking vote in the Senate that sent the Inflation Reduction Act to the president for his signature.

But the drug price negotiations are not the only aspect of the Inflation Reduction Act the president and vice president will be touting Thursday.

Along with the provision that granted the Health and Human Services Secretary the authority to negotiate prices on behalf of Medicare, the act also imposed a $35 monthly cap on out-of-pocket costs for insulin for Medicare beneficiaries, and a $2,000 annual cap on patient costs for drugs taken at home. 

The $2,000 limit is set to go into effect next year. The newly negotiated drug prices will take effect on Jan. 1, 2026.

The negotiated prices  — the maximum prices Medicare Part D plans and the patient will pay for a one-month supply — are as follows:

• Eliquis, for preventing strokes and blood clots, from Bristol Myers Squibb and Pfizer, originally had a list price of $521, the negotiated price is $231, a 56% decrease.
• Jardiance, for diabetes and heart failure, from Boehringer Ingelheim and Eli Lilly. Original list price, $573; negotiated price, $197, a 66% decrease.
• Xarelto, for preventing strokes and blood clots, from Johnson & Johnson. Original list price $517; negotiated price $197, a 62% decrease.
• Januvia, for  type 2 diabetes, from Merck. Original list price, $527; negotiated price $113, a 79% decrease.
• Farxiga, for type 2 diabetes, heart failure, and chronic kidney disease, from AstraZeneca. Original list price $556; negotiated price $179, 68% decrease.
• Entresto, for chronic heart failure, from Novartis Pharmaceuticals. Original list price $628; negotiated price $295, a 53% decrease.
• Enbrel, for rheumatoid arthritis, from Amgen. Original list price $7,106 ($1,777 per weekly dose); negotiated price $2,355, a 67% decrease.
• Imbruvica, for chronic lymphocytic leukemia/small lymphocytic lymphoma and other blood cancers, from AbbVie and Johnson & Johnson. Original list price $14,934; negotiated price $9,319, a 38% decrease.
• Stelara, for Crohn’s disease, ulcerative colitis, psoriasis, and psoriatic arthritis, from Johnson & Johnson. Original list price $13,836; negotiated price $4,695, a 66% decrease.
• Insulin injection products, for diabetes mellitus, from Fiasp and NovoLog, among others. Original price $495; negotiated price $119, a 76% decrease.

The 10 drugs chosen for negotiation by Centers for Medicare & Medicaid Services — single-source brand-name drugs with no therapeutically equivalent generic or biosimilar competition —  were targeted for negotiation based on their total expenditures in the Medicare Part D program. 

Roughly 9 million Part D beneficiaries took at least one of the first 10 medications subject to negotiations in 2022, administration officials said.

The negotiations have faced tremendous push back from the pharmaceutical agency and the U.S. Chamber of Commerce.

In a statement, Stephen J. Ubl, the chief executive of the Pharmaceutical Research and Manufacturers of America, the industry’s largest lobbying group, dismissed the program as nothing more than “price-setting scheme to drive political headlines.”

Ubl also went on to suggest that there’s actually less here than meets the eye.

“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 [pharmacy benefit managers] who ultimately decide what medicines are covered and what patients pay at the pharmacy,” he said in his statement.

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