U.S. President Joe Biden greets audience members during an event promoting lower healthcare costs in the East Room of the White House on August 29, 2023 in Washington, DC. The Biden administration announced a list of the first ten medicines that will now have lower prices following negotiations with Medicare. (Photo : Win McNamee/Getty Images)
The Biden administration revealed on Thursday, August 15, that newly negotiated prices for ten high-cost prescription drugs are expected to yield massive savings.
According to the White House, as shared by CNBC, these new prices will save the Medicare program approximately $6 billion in 2026, and Medicare beneficiaries will save about $1.5 billion in out-of-pocket costs during the same period.
Chiquita Brooks-LaSure, who runs the Centers for Medicare and Medicaid Services (CMS), explained that being able to afford these drugs can improve people's lives, helping them avoid serious health problems and live more fully.
The new prices, which will start in January 2026, are designed to ease the financial burden on Medicare recipients who currently face high prescription drug costs.
The release of these new drug prices is a big step in making essential medications cheaper for older Americans, just after the Inflation Reduction Act, which gave Medicare the power to negotiate drug prices with drug companies for the first time in its 60-year history.
At the same time, the release of these prices comes just one day before the second anniversary of the act, signed by President Joe Biden. The administration's decision to negotiate prices for these drugs involved extensive discussions with drug manufacturers, which have faced opposition from the pharmaceutical industry.
Pharmaceutical companies have expressed concerns that these negotiations could undermine their revenue and innovation efforts. Legal challenges against the negotiations have been filed by several drugmakers, with some cases awaiting court decisions.
Looking ahead, CMS will publish detailed explanations of the negotiated prices by March 2025. Further rounds of negotiations are planned, with up to 15 additional drugs to be selected for price talks in February 2025, and more drugs to follow in the next few years.