HHS announces prices for first 10 drugs subject to Medicare negotiations

The U.S. Department of Health and Human Services (HHS) announced on Thursday Reduced prices for the first 10 prescription drugs which was subjected to Medicare negotiations.

According to HHS, people who have Medicare prescription coverage are expected to save $1.5 billion in out-of-pocket costs when the new prices take effect in 2026.

The Department of Health and Human Services also said Medicare could have saved $6 billion in spending if the negotiated prices had been in place last year.

“Americans are paying too much for their prescription drugs. That makes today's announcement historic. For the first time ever, Medicare has negotiated directly with the pharmaceutical companies, and the American people are better off for it,” said HHS Secretary Xavier Becerra in a Press release“Congressional budget planners (Congressional Budget Office) projected savings of about $100 billion over ten years from the drug negotiations, including $3.7 billion in the first year alone.”

The Inflation Reduction Act, passed by Congress in 2022, allowed the Centers for Medicare and Medicaid Services (CMS) to negotiate the price of branded drugs which accounts for the majority of Medicare Expenses for prescription drugs.

According to the HHS, the selected drugs accounted for $56.2 billion of total Medicare spending in 2023.

The negotiations resulted in price reductions of between 38 and 79 percent.

Merck's diabetes drug Januvia experienced the biggest decline. The price fell by 79 percent from $527 (list price: $113) for a 30-day supply to $113.

It is important to note that the list price of a drug does not necessarily reflect the actual price that patients pay. Drug manufacturers typically offer discounts and rebates to patients and insurers that lower the price of many drugs.

CMS will select 15 additional drugs for price negotiations by February 2025.

The newly negotiated prices

• Merck's Januvia fell 79% to $113 from a list price of $527
• Novo Nordisk's Fiasp and Novo Log fell 76% to $119 from a list price of $527.
• AstraZeneca's Farxiga fell 68% to $178.50 from a list price of $556
• Immunex's Enbrel fell 67% to $2,355 from a list price of $7,106.
• Boehringer Ingelheim's Jardiance fell 66% to $197 from a list price of $573.
• Janssen's Stelara fell 66% to $4,695 from a list price of $13,836.
• Jannsen's Xarelto fell 62% to $197 from a list price of $517.
• Bristol Myers Squibb's Eliquis fell 56% to $231 from a list price of $521
• Novartis' Entresto fell 53% to $295 from a list price of $628.
• Pharmacyclics' Imbruvica fell 38% to $9,319 from a list price of $14,934