The Biden administration is taking a victory lap after federal officials inked deals with drug companies to lower the prices of 10 of Medicare’s most popular and costliest drugs. However, they shared few immediate details about the new prices older Americans will pay when they fill those prescriptions.
White House officials said Wednesday night that they expect U.S. taxpayers to save $6 billion with the new prices, while older Americans could save roughly $1.5 billion on their medications. These projections, however, were based on dated estimates, and the administration shared no details on how they arrived at the figures.
Nonetheless, the newly negotiated prices—still elusive to the public as of early Thursday morning—will impact the cost of drugs used by millions of older Americans to manage diabetes, blood cancers, and prevent heart failure or blood clots. The drugs include the blood thinners Xarelto and Eliquis, as well as diabetes medications Jardiance and Januvia. Last year, Medicare spent $50 billion covering these drugs.
This is a landmark deal for the Medicare program, which provides healthcare coverage for more than 67 million older and disabled Americans. For decades, the federal government had been barred from negotiating with pharmaceutical companies over drug prices, even though private insurers routinely do so.
“This meant that drug companies could basically charge whatever they want for life-saving treatments people rely on, and all Americans paid the price,” White House adviser Neera Tanden told reporters during a Wednesday night call.
The drug deals will become a focal point for Vice President Kamala Harris’ presidential campaign, especially since she cast the tie-breaking vote to pass the law. She will join President Joe Biden on Thursday to announce the drug prices in their first joint speaking appearance since she replaced him at the top of the Democratic ticket. Both are striving to convince voters that costs will trend downward after years of above-normal inflation.
The pair last appeared publicly together when they welcomed back to the U.S. Americans detained in Russia who were freed as part of a massive prisoner swap earlier this month.
Powerful pharmaceutical companies unsuccessfully tried to file lawsuits to stop the negotiations, which became law in 2022 when a Democratic-controlled Congress passed the Inflation Reduction Act, overhauling several Medicare prescription drug regulations. However, executives of those companies have hinted in recent weeks during earnings calls that they don’t expect the negotiations to impact their bottom line.
The Centers for Medicare and Medicaid Services, which oversaw the dealmaking, is expected to release the final drug prices later on Thursday. The new prices won’t go into effect until 2026. Next year, the Department of Health and Human Services can select another 15 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 by 2031.
The official event comes a day before Harris is set to unveil part of her economic agenda on Friday in North Carolina, where she plans to roll out additional measures aimed at cutting costs and boosting incomes for the middle class.
