Biden Administration Names First 10 Medicare Drugs Targeted for Price Negotiation

The Biden administration on Tuesday released the list of the first 10 drugs for which Medicare will seek lower prices by negotiating directly with pharmaceutical companies.

According to the government, people on Medicare who took these 10 drugs paid a combined $3.4 billion out of pocket for them in 2022. The cost to Medicare itself was far greater, at about $50 billion in total.

The authority to negotiate drug prices comes from the Inflation Reduction Act, which was passed last year. The negotiations themselves are set to take place over the next two years, with the resulting prices to be announced by Sept. 1, 2024. The lower prices will not take effect until 2026. The law also allows more drugs to be selected for negotiation for 2027 and later years.

President Biden presented the effort as part of his push to bring down costs for Americans, a central theme of his 2024 reelection message. Speaking to cheering supporters at the White House, he said drug companies fought the measure in Congress and are now challenging it in court. "We're going to see this through. We're going to keep standing up to Big Pharma and we're not going to back down," Biden said.

Sen. Amy Klobuchar, D-Minn., told NPR's Morning Edition that the list contained "blockbuster drugs" and that lowering their costs would help seniors and eventually others who rely on them. She said that when the country's biggest drug-buying group, some 50 million seniors, gets better prices, "it affects the whole ecosystem and the marketplace."

Drugmakers have argued that the new provisions are unconstitutional and have filed a series of lawsuits seeking to block them. Ameet Sarpatwari, an assistant professor at Harvard Medical School, called the coming dispute "a heavyweight battle."

The lobbying group Pharmaceutical Research and Manufacturers of America said the change hands the government too much power and would undermine the innovation and investment needed for the administration's goal of ending cancer. PhRMA CEO Stephen Ubl said in a statement that the announcement was "the result of a rushed process focused on short-term political gain rather than what is best for patients."

Companies also say many of the drugs already carry rebates and discounts. The government said Eliquis, sold by Bristol Myers Squibb, cost Medicare $16.4 billion in the year ending May 2023. The company responded that this figure is more than three times actual program spending because it leaves out rebates, discounts and fees paid to Medicare and Part D plans.

Prescription drug prices in the United States are on average much higher than elsewhere in the world. Other countries have established ways of setting prices, but the U.S. government is starting from scratch. Stacie Dusetzina of Vanderbilt University's School of Medicine said the process will involve considerable back and forth with manufacturers over matters such as research and development and manufacturing costs, as well as federal investments in research that helped bring the drugs to market.