The Biden administration is celebrating a victory after federal officials struck deals with drug companies to lower prices for 10 of Medicare’s most popular and expensive drugs, but it immediately offered few details about the new prices older Americans will pay to fill those prescriptions.
White House officials said Wednesday night that the new drug prices are expected to save U.S. taxpayers $6 billion and older Americans about $1.5 billion on their drug bills.
But those projections were based on outdated estimates, and the administration did not provide details about how it arrived at those numbers.
Still, the newly negotiated prices, which had not yet been released to the public as of early Thursday morning, will affect prices of drugs used by millions of seniors to manage diabetes and blood cancers and prevent heart failure and blood clots.
Those drugs include the blood thinners Xarelto and Eliquis, and the diabetes drugs Jardiance and Januvia.
Medicare spent $50 billion on the drug last year.
It’s a landmark deal for the Medicare system, which provides health insurance to more than 67 million elderly and disabled Americans.
For decades, the federal government has been barred from negotiating with drug companies over drug prices, even though it’s routine for private insurers.
“This means that drug companies can essentially set whatever price they want for a life-saving treatment that people rely on, and Americans have paid the price,” White House adviser Neera Tanden told reporters on a conference call Wednesday night.
The drug trade will likely become a focus of Vice President Kamala Harris’ presidential campaign, especially since she cast the deciding vote to pass the bill.
She is scheduled to announce drug prices with President Joe Biden on Thursday, the first time they have spoken together since she took over for Biden as the top Democratic candidate. Both are struggling to convince voters that drug prices are on track to fall after years of above-normal inflation.
The pair last appeared in public together to welcome back to the United States Americans held in Russia who were released as part of a major prisoner swap earlier this month.
Powerful pharmaceutical companies tried unsuccessfully to sue to block the negotiations, and they became law in 2022 when the Democratic-controlled Congress passed the Stop Inflation Act, an act that overhauled some of Medicare’s prescription drug regulations.
But executives at these companies have signaled in recent weeks on earnings calls that they don’t expect the negotiations to hurt their bottom lines.
The Centers for Medicare and Medicaid Services, which oversaw the deal, is expected to announce final drug prices later Thursday.
The new prices won’t take effect until 2026.
Next year, the Department of Health and Human Services can select 15 more drugs for price negotiations.
Before the drug prices were finalized, the Congressional Budget Office estimated that the negotiations could save the federal government $25 billion in 2031.
The official event came a day before Harris is scheduled to unveil parts of her economic agenda on Friday in North Carolina, where she is also set to unveil other plans to cut costs and help boost middle-class incomes.
