US expects $6 billion in savings from first Medicare drug price negotiations | WTAQ News Talk | 97.5 FM · 1360 AM

By Patrick Wingrove and Trevor Hunnicutt

WASHINGTON (Reuters) – The U.S. government will save $6 billion in the first year from lower prices negotiated by the Biden administration for 10 top-selling prescription drugs under the Medicare health care program for older Americans, officials said on Thursday.

The inflation-reduction bill signed by President Joe Biden, which takes effect in 2022, allows Medicare to negotiate prices on some of the most expensive drugs the program covers for 66 million people. Those new prices, which take effect in 2026, are expected to be announced later today.

The administration said people covered by Medicare, which primarily covers Americans age 65 and older, would also save $1.5 billion this year in out-of-pocket costs for prescription drugs, including the widely used diabetes drugs Januvia and Jardiance, the blood thinners Eliquis and Xarelto, and the leukemia drug Imbruvica.

Officials did not provide further details on the new prices or say why the $6 billion in savings will not be fully passed on to patients.

The Democratic-led administration hopes the cost savings will ease Americans' anger over high prices – an issue they often cite as their biggest concern ahead of the hotly contested November 5 presidential election between Democratic Vice President Kamala Harris and Republican former President Donald Trump.

“Every American should have access to the health care they need, regardless of income or wealth,” said Harris, who is holding events this week about her cost-cutting plans.

Harris' tie-breaking vote in the Senate passed the bill allowing drug price negotiations, even though no Republicans sponsored the bill. In a statement, she also pointed to her work as California's attorney general in “holding big pharmaceutical companies accountable for their fraudulent and illegal practices.”

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More than half of voters in 2020 were over 50, and health care accounts for about 8% of Americans' spending, according to data from the Pew Research Center and the Labor Department.

While inflation has fallen, higher prices since the COVID pandemic have angered consumers. Consumer prices rose 2.9% in the 12 months through July, and the category that includes prescription drugs rose by about the same percentage.

US Health Secretary Xavier Becerra described the negotiations with pharmaceutical manufacturers as comprehensive and intensive.

“After considerable back and forth, either we accepted an offer or a company accepted our offer,” he said.

Last year, the government released its list of the 10 most expensive Medicare drugs that would be subject to negotiations. Among them was Bristol Myers Squibb and Pfizer's top-selling blood thinner Eliquis.

Also selected were the diabetes drug Januvia from Merck & Co, the Eliquis competitor Xarelto from Johnson & Johnson and Imbruvica from AbbVie.

Other drugs selected for negotiations included the rheumatoid arthritis drug Enbrel from Amgen, Jardiance from Boehringer Ingelheim and Eli Lilly, the arthritis and Crohn's disease drug Stelara from J&J and insulin from Novo Nordisk.

The pharmaceutical industry has been trying hard to block the Medicare negotiations, with several companies suing the government and warning that they may have to limit some drug development programs as a result.

Several of these pharmaceutical companies said last month that they did not expect a significant impact on their business after receiving confidential government pricing information for their drugs that would take effect in 2026.

The next round of Medicare drug price negotiations is expected to include 15 more drugs and begin in February.

(Reporting by Patrick Wingrove and Trevor Hunnicutt; Editing by Stephen Coates)