New Medicare Drug Negotiations: What You Need to Know

When the Inflation Reduction Act was signed into law in August of 2022, one of the most notable changes coming to Medicare included drug price negotiations between Medicare and drug manufacturers. This change means that Medicare beneficiaries can expect lower drug prices for some of the most popular high-cost drugs at the pharmacy.

On August 15, 2024, the Biden administration announced the first 10 drugs that have been successfully negotiated. Let’s dive into the details of what’s happening, why it matters, and how it might impact you or your loved ones who rely on Medicare for drug coverage.

What are Medicare Drug Negotiations?

Until now, Medicare wasn’t allowed to haggle over the prices of prescription drugs with drug manufacturers. Unfortunately, Medicare was forced to pay the costs laid out by these companies in order to provide medication to beneficiaries. So, when it comes to high-cost drugs, both Medicare and beneficiaries were forced to pay these extremely high costs, in some cases just to receive life-saving medications.

However, the Biden administration has finally opened the door for Medicare to start negotiating prices directly with drug companies. The goal? To bring down the sky-high costs of some of the most expensive and commonly used medications. This is a huge shift and could mean significant savings for millions of Americans.

Which Drugs Are Being Negotiated in 2024?

There are 10 drugs whose negotiated prices will go into effect on January 1, 2026. If you are prescribed any of these medications, you will see your costs significantly reduced once the negotiated prices are rolled out. These drugs include:

1. Januvia
2. Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, LovoLog FlexPen, NovoLog PenFill
3. Farxiga
4. Enebrel
5. Jardiance
6. Stelara
7. Xerelto
8. Eliquis
9. Entresto
10. Imbruvica

The chart below outlines the negotiated costs for each drug.

How Drug Negotiations Impact Medicare Beneficiaries

For Medicare beneficiaries, the impact of these negotiations could be profound. Lower drug prices mean lower out-of-pocket costs, which can significantly ease the financial burden for seniors, many of whom live on fixed incomes. The savings from these negotiations could also allow beneficiaries to access a broader range of treatments without worrying about extremely high costs.

However, it’s important to note that the full effects of these negotiations may not be immediately felt. Nevertheless, the potential for long-term savings and improved access to essential medications is a promising development for the millions of Americans who rely on Medicare.

According to the Biden administration, this first round of negotiations is estimated to account for $6 billion in savings for taxpayers, and about $1.5 billion in savings for seniors’ out-of-pocket costs in 2026. These savings are expected to exceed $25 billion over the next decade.

How Medicare Drug Negotiations are Shaping the Future of Medicare

While this is a huge step forward for Medicare Part D recipients, it’s not going to happen overnight. The first round of negotiated prices isn’t expected to kick in until January 2026. But the good news is that this is just the beginning. More drugs will be added to the list in the future, leading to even more savings for a wider range of enrollees.

Of course, not everyone’s thrilled about these changes. Some in the pharmaceutical industry are worried about how this might impact innovation and the development of new drugs. But for now, the focus is on making sure that Americans—especially older adults on Medicare—can afford the medications they need.

Despite these challenges, the momentum behind Medicare drug price negotiations continues to grow. With strong public support and a clear mandate from policymakers, there is hope that these efforts will lead to a more sustainable and affordable healthcare system for all Americans allowing them to better afford their medications and allow them extra funds in their pockets each month.

Stay up to Date With Medicare Drug Negotiations and More

Medicare drug price negotiations represent a pivotal moment in the ongoing effort to make healthcare more affordable and accessible in the United States. As the U.S. government continues to roll out these changes, we are excited to see how these negotiations unfold and what impact they will have on the cost of prescription drugs.

For more Medicare information and to keep up with additional drug price negotiations in the future, be sure to stay up-to-date with our blog posts. We strive to provide the most accurate and timely Medicare information possible.