Medicare is expected to save billions by negotiating lower drug prices

In an August 15 press release, the Centers for Medicare and Medicaid Services (CMS) announced that in anticipation of a reduction in prescription drug prices, the Biden-Harris administration had agreed to new, lower prices for all 10 drugs selected for negotiations.

According to the press release, “These negotiated drugs are among the most expensive and commonly prescribed drugs in the Medicare program and are used to treat conditions such as heart disease, diabetes and cancer. The new prices will take effect beginning January 1, 2026, for people with Medicare Part D prescription coverage.”

“If the new prices had gone into effect last year, Medicare would have saved an estimated $6 billion, or about 22 percent, on the ten selected drugs,” CMS emphasized.

“Today we are announcing that we will save Medicare an estimated $6 billion in the first year of our negotiations and that Americans who pay out-of-pocket will save an additional $1.5 billion going forward,” Health and Human Services (HHS) Secretary Xavier Becerra said in a statement.

“CMS negotiated in good faith with the participating pharmaceutical companies throughout the negotiation process, including through written offers, exchanges of counteroffers, and three negotiation meetings for each drug,” CMS said in a fact sheet.