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Enlarge / Prescription drugs are displayed at NYC Discount Pharmacy in Manhattan on July 23, 2024. (credit: Getty | Spencer Platt)
In the first round of direct price negotiations between Medicare and drug manufacturers, prices for 10 expensive and commonly used drugs saw price cuts between 38 percent to 79 percent compared to their 2023 list prices, the White House and the US Department of Health and Human Services (HHS) announced Thursday. The new negotiated prices will take effect on January 1, 2026.
The 10 drugs that were up for negotiations are used to treat various conditions, from diabetes, psoriasis, blood clots, heart failure, and chronic kidney disease to blood cancers. About 9 million people with Medicare use at least one of the drugs on the list. In 2023, the 10 drugs accounted for $56.2 billion in total Medicare spending, or about 20 percent of total gross spending by Medicare Part D prescription drug coverage. But in 2018, spending on the 10 drugs was just about $20 billion, rising to 46 billion in 2022—a 134 percent rise. In 2022, Medicare enrollees collectively paid $3.4 billion in out-of-pocket costs for these drugs.
The 10 drugs as well as their use, 2023 costs, negotiated prices, and savings. (credit: HHS)
For now, it's unclear how much the newly set prices will actually save those who have Medicare enrollees in 2026. Overall costs and out-of-pocket costs will depend on each member's coverage plans and other drug spending. Additionally, in 2025, Medicare Part D enrollees will have their out-of-pocket drug costs capped at $2,000, which alone could significantly lower costs for some beneficiaries before the negotiated prices take effect.
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