This action is on top of progress previously made in reducing the cost of insulin to $35 a month for people with Medicare
For far too long, Americans have paid more for prescriptions drugs than any major economy. But now, thanks to the Inflation Reduction Act, Medicare can directly negotiate prescription drug prices to get a better deal for seniors. Today, Medicare has for the first time selected 10 drugs for negotiation. Seniors paid $3.4 billion in out-of-pocket costs for these drugs in 2022.
Big Pharma has long fought this progress. Their profits grew as they spent more on stock buybacks and dividends than they spent on research and development, even as nearly three in ten Americans struggle to afford their medications because of cost.
Today, the Biden-Harris Administration is delivering on another significant milestone in implementing President Biden’s historic law to lower health care and prescription drug costs and ushering in a new era for American seniors. Over the next 4 years, Medicare will negotiate prices for up to 60 drugs covered under Medicare Part D and Part B, and up to an additional 20 drugs every year after that.
HHS Announces First Set of Drugs Selected for Medicare Price Negotiation
For the first time ever, HHS announced ten drugs selected for Medicare drug price negotiation:
|Commonly Treated Conditions
|Total Part D Gross Covered Prescription Drug Costs from June 2022-May 2023
|Number of Medicare Part D Enrollees Who Used the Drug from June 2022-May 2023
|Average Part D Covered Prescription Drug Costs Per Enrollee
|Prevention and treatment of blood clots
|Diabetes; Heart failure
|Prevention and treatment of blood clots; Reduction of risk for patients with coronary or peripheral artery disease
|Diabetes; Heart failure; Chronic kidney disease
|Rheumatoid arthritis; Psoriasis; Psoriatic arthritis
|Psoriasis; Psoriatic arthritis; Crohn’s disease; Ulcerative colitis
|Fiasp; Fiasp FlexTouch; Fiasp PenFill;
NovoLog; NovoLog FlexPen; NovoLog PenFill
[Source: CMS, https://www.cms.gov/files/document/fact-sheet-medicare-selected-drug-negotiation-list-ipay-2026.pdf]
These ten drugs are among those with highest total spending in Medicare Part D. Millions of Part D enrollees depend on these vital treatments to treat life-threatening conditions including diabetes, heart failure, and cancer, but many struggle to access their medications because of prohibitive costs.
Medicare drug price negotiation will result in lower out-of-pocket costs for seniors and will save money for American taxpayers. Negotiations for the first group of selected drugs will begin in 2023, with negotiated prices going into effect in 2026.
Out-of-Pocket Costs for Drugs Covered Under Part D Selected for Drug Price Negotiation, by State
Today HHS also released a report showing that 9 million Medicare Part D enrollees took the drugs covered under Part D selected for negotiation and paid a total of $3.4 billion in out-of-pocket costs for these drugs in 2022. For enrollees without additional financial assistance, average annual out-of-pocket costs for these drugs were as high as $6,497 per enrollee in 2022.
To view a state-by-state breakdown of the number of Medicare enrollees who use the prescription drugs selected for negotiation and their out-of-pocket costs, visit HHS’s website.
Continuing to Lower Prescription Drug Costs
Every day, millions of seniors are saving money on prescription drug costs because of the Biden Administration’s actions. People with Medicare are saving an average of $70 in out-of-pocket costs on vaccines like shingles and Tdap because President Biden’s Inflation Reduction Act made recommended vaccines free for beneficiaries starting this past January. Nearly four million seniors and others on Medicare with diabetes started to see their insulin costs capped at $35 per month this past January, saving some seniors hundreds of dollars for a month’s supply. And some seniors taking drugs covered under Part B for which manufacturers have hiked prices faster than inflation are saving up to $449 in lower coinsurance this quarter thanks to the new Medicare inflation rebates.
People with Medicare will continue to see their prescription drug costs go down as more provisions of the Inflation Reduction Act go into effect in the coming years. Part D enrollees will no longer pay 5% co-insurance when they reach the catastrophic phase of their benefit starting in 2024. Nearly 19 million seniors and other Part D beneficiaries are projected to save $400 per year on prescription drugs when the out-of-pocket cap drops to $2,000 in 2025, and 1.9 million enrollees with the highest drug costs will save an average of $2,500 per year. And the lower prices negotiated for the high-spend drugs selected today will go into effect in 2026.
The President’s Budget for Fiscal Year 2024 builds upon the Inflation Reduction Act to continue lowering the cost of prescription drugs. For Medicare, this includes further expanding the newly established negotiation authority by extending it to more drugs and bringing drugs into negotiation sooner after they launch. The Budget also includes proposals to curb inflation in prescription drug prices and cap the prices of insulin products at $35 for a monthly prescription in the commercial market to lower drug costs for all Americans.
Official news published at https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/29/fact-sheet-biden-harris-administration-announces-first-ten-drugs-selected-for-medicare-price-negotiation/