August 15, 2024
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Medicare released its first set of negotiated drug prices on Thursday. The reduced sticker prices for 10 drugs used for diabetes, heart failure and other conditions would have saved the program $6 billion in 2023.
Medicare will pay less for 10 major drugs beginning in 2026, the result of months of negotiations between the White House and pharmaceutical companies.
The diabetes drugs Jardiance, Januvia and Fiasp are among those that will cost less. So are Imbruvica, a blood cancer drug, and Entresto, a medication for heart failure. The costs for the 10 drugs have been slashed by 38% to 79%.
The new prices will be in place Jan. 1, 2026. Last year, the Medicare program, which is funded by U.S. taxpayers, would have saved $6 billion, according to the Department of Health and Human Services. Medicare Part D recipients would have paid $1.5 billion less in out-of-pocket costs for their medications.
Medicare Part D provides prescription drug coverage for people 65 and over and people with certain disabilities, including those on Social Security Disability Insurance.
"Americans pay too much for their prescription drugs," HHS Secretary Xavier Becerra said. "For the first time ever, Medicare negotiated directly with drug companies and the American people are better off for it. ... Empowering Medicare to negotiate prices not only strengthens the program for generations to come, but also puts a check on skyrocketing drug prices."
For example, Pharmacyclics, which produces Imbruvica for the treatment of blood cancers, agreed to a 38% drop in price in 2026 for a 30-day supply to $9,319 from $14,934 in 2023. Jardiance Boehringer, the company that makes Ingelheim — a drug commonly used to treat diabetes, heart failure and chronic kidney disease — will lower the price for a 30-day supply by 66% to $4,695 in 2026. It was priced at $13,836 in 2023.
However, it is difficult to determine how much the reduced prices will impact the average Medicare member, Politico reported. That's because Part D already covers most of the costs of prescription medications taken by seniors at home. The newly-negotiated prices are sticker prices. They are used when drug companies negotiate rebates with middlemen representing the private insurers that administer Part D. These rebates, which are kept confidential, bring down the sticker prices. And out-of-pocket caps and copays also influence prices for Part D members.
The New York Times reported that only a subset of the seniors who take these drugs may see reduced costs – those whose insurance mandates they pay a percentage of drug's costs before discounts. But even in those cases, it may do little to help the seniors that hit the $2,000 cap on annual drug costs.
Democrats had been pushing for years for the federal government to be able to negotiate prices with drug companies, which happens with private insurers. President Joe Biden signed a law in 2022 that gave Medicare the ability to negotiate the prices of certain high-cost medications that do not have generics or "biosimilars," drugs that are nearly the same but not identical to the original medications.
The Centers for Medicare & Medicaid Services selected 10 drugs for the first set of negotiations, with the price changes to take effect in 2026. Those medications, their uses and their newly negotiated sticker prices are listed in the table below.
| Medication | Use | 2026 Cost (30-Day Supply) | 2023 Cost (30-Day Supply) | Price Reduction |
| Januvia | Diabetes | $113 | $527 | 79% |
| Fiasp, NovoLog | Diabetes | $119 | $495 | 76% |
| Farxiga | Diabetes, Heart Failure, Chronic Kidney Disease | $178.50 | $556 | 68% |
| Enbrel | Rheumatoid Arthritis, Psoriasis, Psoriatic Arthritis | $2,355 | $7,106 | 67% |
| Jardiance | Diabetes, Heart failure, Chronic Disease | $197 | $573 | 66% |
| Stelara | Psoriasis, Psoriatic Arthritis, Crohn's Disease, Ulcerative Colitis | $4,695 | $13,836 | 66% |
| Xarelto | Blood Clots | $197 | $517 | 62% |
| Eliquis | Blood clots | $231 | $521 | 56% |
| Entresto | Heart Failure | $295 | $628 | 53% |
| Imbruvica | Blood Cancers | $9,319 | $14,924 | 38% |
The selected drugs accounted for $56.2 billion in total Medicare spending, or approximately 20% of Part D spending in 2023. Between 2018 and 2022, Medicare spending for these 10 drugs more than doubled, from about $20 billion to about $46 billion, according to HHS.
About 9 million of the 66 million Medicare enrollees use at least one of these drugs. Negotiations will continue, with the price tags of 15 more medications on the table for 2027, according to HHS.
