New prescription drug deal could save Medicare beneficiaries and taxpayers billions

WASHINGTON (TN) — The Biden administration just announced an agreement with pharmaceutical companies to lower the prices of ten of the most expensive Medicare drugs.

Engy Ziedan, an economics professor at Tulane University, said the Inflation Reduction Act, which is set to take effect in 2022, helped set the stage for Thursday's prescription drug deal.

“With the passage of the Inflation Reduction Act, Medicare announced that price negotiations for certain drugs will take place over the next few years,” Ziedan said.

Two years later, the first ten drugs have just been announced. The most common is Eliquis, a blood thinner used by nearly four million Medicare beneficiaries. Under the new contract, the drug's price will be reduced by 56%.

The price drops from $521 to $231,” Ziedan said.

In addition to blood thinners, drugs to treat diabetes and heart disease are also on the list, with reductions ranging from 38% to 79%.

“Prices will be lower if you have diabetes or heart disease,” Ziedan said.

While these price cuts won't take effect until 2026, Utibe Essien, assistant professor of medicine at UCLA, said a new rule will go into effect in 2025 that will cap how much policyholders can pay each year.

“Including a copayment limit that caps copayments for Medicare beneficiaries at about $2,000,” Essien said.

Essien believes this will be a tremendous help to the 67 million Medicare beneficiaries, nearly 90 percent of whom are over 65 years old.

People are saving thousands of dollars every month, if not every year, on their prescription drugs,” Essien said.

The Biden administration said taxpayers are expected to save $6 billion with these new rates, but the Associated Press reports that details of those calculations have not been released.