Medicare drug price negotiations kick off with price offers on these 10 drugs

Aiming to make lifesaving medications more affordable, the Biden administration on Thursday sent offers to drug companies that make 10 widely prescribed drugs for older Americans.

Thursday's effort was the opening salvo over Medicare drug price negotiations. Department of Health and Human Services officials did not reveal how much the government's price negotiators initially offered to pay pharmaceutical companies that make drugs to treat conditions such as heart failure, stroke, diabetes and autoimmune disease.

The drugs include Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara and the insulins Fiasp and NovoLog.

Biden administration officials said the initial offers will start a back-and-forth with drug manufacturers over the spring and summer months. Final prices for the first batch of drugs will be made public Sept. 1, and the negotiated prices will take effect in January 2026.

Under President Joe Biden's Inflation Reduction Act, another 30 drugs will be selected over the next two years for negotiated prices that will be rolled out in 2027 and 2028.

HHS Secretary Xavier Becerra heralded a "new era in Medicare" with the federal heath program's newfound authority to negotiate drug prices under Biden's signature health and climate legislation.

"These are good-faith, upfront negotiations, not price setting," Becerra said. "And it will take both sides to reach a fair price."

Big Pharma and allies fight price negotiations in court

Drug companies and their industry allies have filed nine lawsuits challenging different aspects of the federal law. So far, the legal challenges haven't halted the administration's efforts to haggle for cost savings.

The Pharmaceutical Research and Manufacturers of America, a trade group representing drug manufacturers, has argued the federal efforts to implement price negotiations have lacked transparency, discounted patients' input and could reduce drug industry investments to research lifesaving cures.

“This continues to be an exercise to win political points on the campaign trail rather than do what’s in the best interest of patients," said Alex Schriver, a senior vice president of public affairs at PhRMA.

Medicare targets drugs that lack competition

A senior Biden administration official said the president has said drug companies should have a fair return on their investments but noted the drug selected for negotiation have been on the market for years without generic alternatives.

The 10 selected drugs accounted for about 20% of total spending for Medicare Part D prescription drugs over the past year, officials said. In all, those drugs cost Medicare and enrollees about $50.5 billion from June 1, 2022, through May 31 this year − the period for which costs were evaluated. Medicare enrollees paid $3.4 billion in out-of-pocket costs, a senior administration official said.

The Congressional Budget Office projects the drug price negotiations will save the federal health program $98.5 billion over one decade.

Free vaccines and $35 monthly insulin

While consumers won't see discounts from negotiated prices until 2026, other Inflation Reduction Act provisions already have delivered savings.

Medicare enrollees now can get recommended vaccines with no cost sharing, and the federal law limits out-of-pocket cost at $35 for covered insulin products. In 2025, enrollees in Medicare's Part D drug plans will have their out-of-pocket expenses for prescriptions capped at $2,000 a year.

Drug prices: Searchable database of pharmacies' cost for medication

Ken Alltucker is on X, formerly Twitter, at @kalltucker, or can be emailed at alltuck@usatoday.com.

This article originally appeared on USA TODAY: Biden administration launches Medicare drug price negotiations