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Medicare

U.S. drug price negotiations are underway. Here’s what that will mean for you—eventually

By
Chris Morris
Chris Morris
Former Contributing Writer
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By
Chris Morris
Chris Morris
Former Contributing Writer
Down Arrow Button Icon
February 2, 2024, 10:06 AM ET
Negotiations are underway that could bring prices down for Medicare.
Negotiations are underway that could bring prices down for Medicare. Emily Elconin—Bloomberg/Getty Images
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Negotiations are underway between the federal government and pharmaceutical companies to determine how much Medicare patients will pay for 10 critical and commonly prescribed drugs for patients with cancer, diabetes, and other illnesses.

The talks, which are expected to run for months, come following the passage of the Inflation Reduction Act, which authorized Medicare to haggle over prices. Drugmakers are trying to overturn that provision with both lawsuits and lobbying efforts—and those efforts are expected to continue for some time.

For patients, it could mean lower out-of-pocket prices, but there are a few caveats. First, any savings that result from these negotiations are only applicable to Medicare beneficiaries. Second, the discounted prices won’t take effect until January 2026 (and that’s only if Big Pharma is unable to have the Act overturned).

Those price savings, though, could lower Medicare monthly premiums and out-of-pocket expenses for drugs. And patients who take the drugs being negotiated and pay part of the cost out of pocket could save even more.

At present, 10 drugs are being renegotiated:

  • Eliquis – used to prevent clotting
  • Jardiance – fights Type 2 diabetes
  • Xarelto – used to prevent clotting
  • Januvia – fights Type 2 diabetes
  • Farxiga – fights Type 2 diabetes
  • Entresto – heart failure drug
  • Enbrel – treats rheumatoid arthritis
  • Imbruvica – leukemia drug
  • Stelara – for treatment of psoriasis and gut disorders
  • Fiasp/NovoLog – insulin

Some of these drugs, such as Stelara, have extraordinarily high prices. Others are used by millions of patients, which increases Medicare reimbursement costs. Combined, they account for over $50 billion in annual costs.

Negotiations will continue as late as Aug. 1. Final prices for the first batch of drugs will be made public Sept. 1. The Congressional Budget Office estimates the negotiations will save Medicare $98.5 billion over the next 10 years.

Another 30 drugs will be selected over the next two years, with negotiated prices to be rolled out in 2027 and 2028.

About the Author
By Chris MorrisFormer Contributing Writer

Chris Morris is a former contributing writer at Fortune, covering everything from general business news to the video game and theme park industries.

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