Biden and Harris celebrate Medicare drug price cuts that will save billions

In their first joint appearance since she replaced him on the Democratic ticket, President Joe Biden and Vice President Kamala Harris on Thursday celebrated a milestone in the new program that empowers Medicare to negotiate lower prices for 10 of the most expensive drugs for seniors.

The Centers for Medicare & Medicaid Services published Results of the negotiation process initiated as part of the Inflation Reduction Act of 2022. CMS said the program will save Medicare about $6 billion in the first year, with Medicare Part D enrollees saving an additional $1.5 billion in out-of-pocket costs when the lower prices take effect on Jan. 1, 2026.

Currently, approximately 9 million Medicare D beneficiaries take at least one of the 10 drugs selected for negotiations. Discounts range from 38% to 79% off the list price, according to a Profile provided by the White House. The biggest price cut is for Merck's diabetes drug Januvia, which will drop from $527 to $113 for a 30-day supply. Some of Novo Nordisk's insulin drugs, including NovoLog and Fiasp, will see the second-biggest price reduction, with the 30-day price falling 76% from $495 to $119.

Pharmaceutical manufacturers protest: Pharmaceutical companies have criticized the negotiating program, saying it will reduce profits, hinder the development of new drugs and may not save patients any money. “There is no guarantee that patients will pay less out of pocket because the law has done nothing to curb abuse by insurance companies and [pharmacy benefit managers] “Most of them ultimately decide which drugs are covered and what patients pay at the pharmacy,” said Steve Ubl, president of the industry association PhRMA, in a statement.

The Wall Street Commentary Page warned this week that the “inevitable, if invisible, result of the Democrats' raid on the drug companies will be a reduction in the number of new drugs,” and speculated darkly that “the Democrats' goal is to expand government control over private health care markets and generate more money to fund their society from cradle to grave.”

Still, some pharmaceutical companies have recently changed their minds, saying the price cuts will not have a significant financial impact overall. “We are increasingly confident that we can manage the impact of the IRA on Eliquis,” Bristol-Myers Squibb CEO Chris Boerner said recently. according to the Journalreferring to a drug whose price was reduced by 56% as a result of the negotiations.

Stacie Dusetzina, health policy expert at Vanderbilt University, said Reuters that she does not believe that the discounts are large enough to change the direction of the pharmaceutical industry. “This makes me suspect that the companies can continue to make profits [and] have incentives to innovate,” she said.

Democrats celebrate: At an event in Maryland, Biden said fighting skyrocketing drug prices was part of his larger effort to help the middle class, even if it came at the expense of corporate profits. Biden also tipped his hat to his vice president, who cast the deciding vote in the Senate for the inflation-fighting bill and whose popularity has risen in the polls since she became the Democratic nominee. “Guys, I have an incredible partner,” he said. “The progress we've made. She's going to be a damn good president.”

Biden said his efforts to curb high drug prices are “just beginning” and that he and Harris will “continue to take on the pharmaceutical industry.” Harris said she, too, has been working to lower drug prices for years. “My entire career, I've worked to hold bad actors accountable and lower prescription drug costs,” she said. “Medicare can use that to [negotiating] Power to compete on equal terms with the big pharmaceutical companies and negotiate lower drug prices.”