Historic White House negotiations with the pharmaceutical industry to lower drug prices will save U.S. consumers $1.5 billion – and more

It's well-documented that Americans pay far more for prescription drugs than people in any other developed country. But this week, the White House concluded “negotiations” with the pharmaceutical industry that will finally lower those prices for millions of seniors on Medicare.

The Inflation Reduction Act of 2022, passed in the Senate on a tie vote by the Vice President, will not only save $1.5 billion in out-of-pocket costs for seniors, but will also save the national Medicare system $6 billion – in the first year alone.

For millions of seniors and people with disabilities who receive Medicare insurance, the cost of some of the most common and expensive prescription drugs used to treat heart disease, cancer, diabetes, blood clots and more will go down.

The Department of Health and Human Services has reached agreements with the pharmaceutical manufacturers of 10 different drugs whose prices have risen sharply since they were introduced to the market. Some of the new prices, such as two for diabetes, will be reduced by as much as 79 percent for patients with drug coverage through Medicare Part D.

The 10 drugs are among those with the highest total spending in Medicare Part D. If negotiated prices took effect in 2023, Medicare would have saved an estimated $6 billion. If negotiated prices take effect in 2026, Medicare Part D enrollees will save an estimated $1.5 billion in out-of-pocket costs.

For example, a Medicare beneficiary taking Stelara for arthritis who pays $3,459 for a 30-day supply today would pay only $1,174 in 2026. However, in addition to these new savings from negotiated drug prices, many of these Medicare patients will also benefit from the new $2,000 cap on out-of-pocket costs (as set out in the Inflation Reduction Act).

Of the 10 drugs, Eliquis is the most commonly prescribed and currently treats blood clots in nearly four million Americans on Medicare. Its monthly price will drop by 56%, saving the nation billions of dollars.

Other drug prices are falling: Crazy insulin prices are a thing of the past in the US after the government introduced a monthly fee of $35

As set out in the law, more drugs will be selected each year – up to 15 drugs for negotiation in 2025 and up to 20 drugs in each subsequent year.

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