Negotiations on lower drug prices work and save billions

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From Michael Cabonargi

15 August 2024

Guest opinion. President Biden always says that making necessary medicines affordable is about dignity, hope and justice. Those words have been at the heart of the Biden-Harris administration's work to implement the President-introduced Prescription Drug Cost Reduction Act, also known as the Inflation Reduction Act. This week marks a historic milestone as the Biden-Harris administration announced new, lower prices for 10 drugs selected for the first cycle of Medicare price negotiations.

As regional director for the U.S. Department of Health and Human Services (HHS), part of my job is to promote the new benefits of the Inflation Reduction Act in the Midwest.. As I traveled through the Midwest, I have spoken to countless people across the Midwest who are shocked to learn that until now, the Medicare program was prohibited from negotiating directly with pharmaceutical companies on behalf of the insured. But the Biden-Harris administration's Lower Price Prescription Drug Act lifted that ban, paving the way for lower prices for the insured and reinforcing the promise of Medicare for our children and grandchildren. Last year, we announced the 10 drugs selected for the first round of negotiations, including expensive, life-saving drugs like Eliquis, a blood clot prevention drug, and Januvia, a type 2 diabetes treatment. In total, in 2023, about nine million people with Medicare used one or more of the 10 drugs selected, costing taxpayers over $56 billion. We are finally making a difference to reduce those costs.

On August 15, 2024, President Biden and Vice President Harris announced the new, lower prices agreed to by HHS and the pharmaceutical companies involved. These new, lower prices will take effect on January 1, 2026 – ushering in a new era of savings for people with Medicare and the Medicare program. Had these prices been in effect in 2023, they would have saved Medicare an estimated $6 billion, or 22 percent of what Medicare spent on these drugs – that's money saved for taxpayers and working families.

This is just the beginning. Under the President's law, new drugs will be selected for negotiation each year, potentially benefitting even more seniors and people with disabilities with Medicare and saving taxpayers even more money. For more information on the drugs selected for negotiation and the new prices, visit LowerDrugCosts.gov or MedicamentosBajoPrecio.gov.

Access to life-saving prescription drugs shouldn't force working families to make heartbreaking decisions, like forgoing necessary medicines to put food on the table or pay the rent. That's what our work to implement the law is all about—and this week, we're proud to usher in a new era for Medicare marked by better prices, hope, and peace of mind.

Michael Cabonargi is the regional director for the Great Lakes Region (Region V) of the U.S. Department of Health and Human Services (HHS) and is responsible for Illinois, Michigan, Ohio, Indiana, Wisconsin, Minnesota, and 34 tribal lands.
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