Centers for Medicare & Medicaid Services (CMS) has announced the first 10 drugs covered under Medicare (Part D) selected for negotiation. The negotiations with participating drug companies will occur in 2023 and 2024 and any negotiated prices will become effective beginning in 2026.
The medications which treat diabetes, cancer and other disorders are taken by millions of older Americans. CMS selected the drugs through a process that prioritized those that account for the highest Medicare spending, have been on the market for years, and do not yet face competition from rivals. Additional medications will be selected for price negotiations in the coming years.
Medicare gained the authority to negotiate the price of some prescription medicines when the Inflation Reduction Act passed last year. The recent announcement is a key step toward those negotiations, which will unfold over the coming months, with the new prices taking effect in 2026. The initial list of medications include:
The 10 selected medications range from very expensive drugs taken by relatively few older Americans to cheaper drugs taken by huge numbers of people. Imbruvica, which in a recent 12-month period was taken by 20,000 Medicare beneficiaries with blood cancers, has a sticker price of $17,000 a month. The blood thinner Eliquis, which was taken by 3.7 million beneficiaries, has a monthly sticker price under $600. Review the CMS Fact Sheet for additional information.
The negotiation program is projected to save the government an estimated $98.5 billion over a decade. It is also expected to eventually reduce insurance premiums and out-of-pocket costs for many older Americans, though the magnitude of those savings remains to be seen.
Some of the most significant direct savings for patients may accrue starting in 2028, when the first negotiated prices go into effect for drugs that are administered in clinics rather than taken at home. At that point, patients without supplemental insurance are likely to see their out-of-pocket costs drop for those drugs. Other provisions including a new $35 monthly cap on out-of-pocket costs for insulin and, starting in 2025, a $2,000 annual cap on patient costs for drugs taken at home will most likely do more to directly save money for Medicare beneficiaries.
This article was originally published in The New York Times on August 29, 2023 and written by Sheryl Gay Stolberg and Rebecca Robbins.