Tag Archives for Affordable Care Act

Medicare Enrolled will see Lower Costs on Select Drugs in 2026

Published in Blackstone Valley Call & Times on December 2, 2025

With Medicare Open Enrollment ending next week, the Centers for Medicare & Medicaid Services (CMS) has announced that last year’s Medicare negotiations produced a net savings of 44%—about $12 billion—on 15 widely used prescription drugs that treat cancer and other serious chronic conditions.

The new Maximum Fair Prices (MFPs) for these 15 drugs will take effect on January 1, 2027. Combined with the 10 drugs already negotiated—whose MFPs take effect January 1, 2026—a total of 25 drugs will have negotiated lower prices. These medications, used to treat conditions such as cancer, diabetes, asthma, and cardiovascular and neurological disorders, represent some of the highest Medicare Part D spending.

The Beginning of Drug Price Negotiations

Three years ago, after President Biden signed the Inflation Reduction Act (IRA) in August 2022, CMS began developing the process for Medicare’s first-ever drug price negotiations. On March 15, 2023, the federal agency issued its initial program guidance and received more than 7,500 public comments from consumer groups, patient advocates, drug manufacturers, and pharmacies. Revised guidance followed on June 30, 2023.

On August 29, 2023, CMS released the first list of 10 high-cost drugs selected for negotiation—marking the first time in Medicare’s history that it could negotiate directly with pharmaceutical companies.

Pharmaceutical industry groups and several companies attempted to block the law in court. In response, 70 organizations and 150,000 petition signers urged Merck, Bristol Myers Squibb, Janssen Pharmaceuticals, Astellas Pharma US, the Pharmaceutical Research and Manufacturers of America (PhRMA), and the U.S. Chamber of Commerce to drop their lawsuits. Multiple organizations also filed amicus briefs supporting the law.

Three years in process, and with courts ultimately allowing the program to proceed, that first round of 10 drugs with negotiated prices will take effect in 2026.

CMS Drug Negotiations Added 15 Drugs

On January 17th, CMS announced it had selected 15 additional drugs for the second cycle of negotiations under Medicare Part D and on November 25th, it was announced that agreements had been reached on all of them. These medications are among the most costly and most commonly used by Medicare beneficiaries, treating conditions such as cancer, diabetes, and asthma. The new round of negotiations is expected to save Medicare billions and strengthen the program’s long-term sustainability.

“This year’s results stand in stark contrast to last year’s,” said CMS Administrator Mehmet Oz, MD, in announcing the second cycle of negotiations.  “Using the same process with a bolder direction, we have achieved substantially better outcomes for taxpayers and seniors in the Medicare Part D program — not the modest or even counterproductive ‘deals’ we saw before.”

“Whether through the Inflation Reduction Act or President Trump’s Most Favored Nation policy, this is what serious, fair, and disciplined negotiation looks like,” adds CMS Deputy Administrator and Medicare Director Chris Klomp. “I’m deeply proud of our team, who execute exceptionally well to bring affordability to the country in everything we do.”

Between January 1 and December 31, 2024, approximately 5.3 million Medicare Part D enrollees used one or more of these 15 drugs. Total gross Part D spending for them was $42.5 billion, representing about 15% of all Part D drug costs.

Anthony Wright, executive director of Families USA, praised the newly released negotiated prices, stating that they show what is possible when “policymakers put patients before corporate profits.” Wright emphasized that these reductions build on the work of establishing the Drug Price Negotiation Program, which aims to provide financial relief to older adults and people with disabilities.

Wright noted that the first and second rounds of negotiated drugs together account for about one-third of Medicare Part D spending, with price reductions ranging from 38% to 85%. In 2027, beneficiaries using these drugs are projected to save $685 million in out-of-pocket costs. He added that the savings support both individual beneficiaries and the long-term sustainability of the Medicare program.

Despite pharmaceutical companies’ continued attempts to limit the program—through lawsuits and legislative provisions such as those in H.R. 1—Wright said the negotiation program remains “the most effective tool currently available to lower drug prices.”

“The Medicare Negotiation Program changed the trajectory of drug pricing in the United States, helping to reduce Big Pharma’s monopoly pricing power, which dictated prices to Americans on Medicare for two decades,” said Merith Basey, executive director of Patients for Affordable Drugs in a statement. “This second round of negotiations — now under President Trump — marks another major milestone, delivering continued savings for patients and taxpayers,” he said.

“The lower negotiated prices are more than numbers on a page. For patients who’ve been forced to work multiple jobs, cut pills in half, or choose between filling a prescription and buying groceries, these lower prices will bring long-overdue relief, flexibility, and stability,” added Basey.

“The requirement that Medicare negotiate lower prices for prescription drugs continues to pay dividends for older Americans and taxpayers,” adds Richard Fiesta, executive director of the Alliance for Retired Americans. “The announcement of lower drug prices for 15 high-priced drugs is a win for more than 5 million seniors who take these drugs to treat asthma, diabetes, lung disease and other serious conditions, and will soon pay less for their medications,” he says.

“The 4.4 million members of the Alliance are pleased that the Trump Administration has followed the law, negotiated these prices, and defended this law in court,” Fiesta says, calling on Congress to increase the number of drugs subject to price negotiations.

While the White House along with aging groups praise the impact of IRA’s Medicare drug negotiation provisions, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued a statement calling it “flawed.”

“Whether it is the IRA or MFN, government price setting for medicines is the wrong policy for America. Price setting does nothing to rein in PBMs who decide which medicines are covered and what patients pay. In fact, many patients are facing additional coverage barriers and paying more out-of-pocket for medicines because of the IRA, warns Alex Schriver, Senior Vice President of Public Affairs.

“These flawed policies also threaten future medical innovation by siphoning $300 billion from biopharmaceutical research, undermining the American economy and our ability to compete globally,” states Schriver, noting that PhRMA members are stepping up to make medicines more affordable by enabling direct purchase at lower prices and investing in U.S. manufacturing and infrastructure.

Lower Drug Cost Legislation Introduced

Congressman John B. Larson (D-CT), a senior member of the House Ways and Means Committee, praised the latest CMS announcement, estimating that both negotiation rounds will save older Americans more than $2 billion per year in out-of-pocket costs. Larson noted that families and seniors continue to struggle with rising prices, especially for prescription drugs.  The lawmaker pushed to enable Medicare to negotiate drug prices to lower drug costs by the enactment of IRA.

Last week, House Democrats introduced the Lower Drug Costs for American Families Act, aimed at closing loopholes in H.R. 1 and further reducing prescription drug prices. The bill (H.R. 6166), introduced November 20 by Ranking Members Frank Pallone Jr. (Energy and Commerce), Richard Neal (Ways and Means), and Bobby Scott (Education and Workforce), has been referred to all three committees.

Key provisions of the bill would:

  • Extend Medicare’s price negotiation authority to all Americans with private insurance—covering more than 164 million people with employer-sponsored plans and over 24 million enrolled in Affordable Care Act plans
  • Apply inflation-based rebate protections to private insurance markets, potentially saving $40 billion over 10 years
  • Increase the number of negotiated drugs from 20 to 50 per year
  • Extend the $2,000 annual out-of-pocket prescription drug cap to privately insured patients
  • Cap insulin costs at $35 per month for those with private insurance
  • Close the orphan-drug loophole that allows companies to avoid negotiation
  • Require consideration of international drug prices to ensure Americans do not pay three to five times more than patients in other countries

Continue the Momentum

According to CMS, the agency will announce the specifics on 15 drugs for the third round of Medicare price negotiations by February 1, 2026. This new round will include drugs paid under Medicare Part B for the first time and will begin with negotiated prices effective January 1, 2028. CMS has already released final guidance for the program and will also use this process to select drugs for renegotiation in previous cycles. IRA also establishes an ongoing process where more drugs will be selected for negotiation in subsequent years.

A Dec. 2024 AARP survey found that almost 3 in 5 adults age 50 and older expressed concern about their ability to afford prescriptions over the near future.  Respondents included both Medicare beneficiaries and younger persons. About 96 percent of the respondents call on the government to do more to lower pharmaceutical prices.

AARP noted that this survey was taken right before a new $2,000 cap on out-of-pocket drug expenses took effect in 2025.

With the announcement of lower drug costs that result from Medicare’s round 2 drug negotiations, there is an  opportunity to build on this momentum for real change. Lawmakers can legislate to put the public’s health above profit by giving consumers more power to negotiate, making competition stronger, and keeping patients from having to pay too much out of pocket.

It is now time for Congress to act.

Medicare Drug Price Negotiation Program to save billions. Cut costs for 10 drugs, 2026

Published in RINewsToday on August 19, 2024

On Aug. 16, 2022, President Joe Biden signed into law the Inflation Reduction Act of 2022 (IRA), which aimed to reduce the federal budget deficit, invested in domestic energy production while promoting the use of clean energy.  The historic federal law (Public Law 117-169) also lowered the health cost for millions of older Americans by lowering the high cost of prescription drugs by granting Medicare the power to directly negotiate drug prices with drug companies 

 IRA also created the first ever annual cap on out-of-pocket drug costs for Medicare beneficiaries,  capping the cost of each covered insulin at $ 35 per month, and the law also made the Affordable Care Act market plans more affordable.

On Aug. 15, 2024, just one day before IRA’s 2nd Anniversary, Biden and Vice President Kamala Harris unveiled the new lower prices for 10 drugs in which Medicare and drug companies negotiated under the new Medicare Drug Price Negotiation program. As a result, the negotiated prices will save the Medicare program some $6 billion.

Before a crowd of thousands at the Price George’s Community College in Largo, Maryland, Biden and Vice President Kamala Harris who has become the presumptive Democratics nominee for president, made the announcement. 

“We finally beat Big Pharma,” said  Biden.

 Sixty-five million Medicare beneficiaries give Medicare “collecting bargaining power,” noted the Vice President. “And now Medicare can use that power to go toe-to-toe with Big Pharma and negotiate lower drug costs,” said Harris.

And that they did. 

Medicare’s Bargaining Power Puts the Brakes on Rising Drug Costs

 Empowered by the passage of IRA, Medicare was able to negotiate 38-79% discounts on 10 life-saving drugs that treat heart disease, diabetes, cancer, and other serious conditions.  These include popular, brand name drugs such as Eliquis, Jardiance, Farxiga, and Stelara — some of the expensive and commonly prescribed medications in the Medicare program.

 The Centers for Medicare and Medicaid Services (CMS) announced on Aug. 15, 2024, beneficiaries will now save $1.5 billion in out-of-pocket drug costs thanks to newly announced prices negotiated by the Medicare program with Big Pharma. The negotiated prices will save the Medicare program some $6 billion in costs. 

According to CMS, “the selected 10 drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20%, of total Part D gross covered prescription drug costs between June 1, 2022 and May 31, 2023, which is the time period used to determine which drugs were eligible for negotiation.”    8 Eight of the 10 drugs selected for this year’s negotiation program raised their prices in 2024 – after all 10 drugs were already priced three to eight times higher in the United States than in other countries, noted the federal agency.

The new prices take effect in January, 2026.  Under the IRA’s provisions, Medicare will select up to 15 more drugs covered under Part D for negotiation by Feb.1, and those prices will take effect in 2027. It will expand 20 drugs starting in 2028, says CMS. 

“It’s no exaggeration to say that this a truly historic moment.  We have been advocating for Medicare to have the power to negotiate drug prices with Big Pharma since 2003, when prescription drug coverage was added to the program,” said Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM).  “Unfortunately, the law literally forbade Medicare from negotiating prices with drug makers. The Inflation Reduction Act finally changed that, he said.

According to Richtman, billions saved are proof that the federal government can, and should, leverage its buying power to save Medicare beneficiaries  money — in this case, giving relief to millions of seniors of not having to pay for high drug costs. “This is momentous news for Medicare beneficiaries and the Medicare program itself,” he says.

“The negotiated prices of these first 10 drugs are a great start. We would like to see even more drugs included more rapidly in the negotiation process so that seniors can reap the maximum cost-savings that this process can provide,” said Richtman.                                                                                    

Responding to the White House’s announcement of new details about Medicare drug price negotiations, in a statement Richard Fiesta, Executive Director of the Alliance for Retired Americans, noted that it took more than two decades of activism on the ground, advocacy by thousands of members and the Biden Administration to push for passage of IRA, giving Medicare the power to negotiate fair prices to patients and taxpayers.

 “The savings are staggering. The new prices are 60% lower on average with two drugs slashed by more than 75% per month,” says Fiesta. “Combined with the $ 2,000 out-of-pocket cap on drug costs that will take effect in January, millions of Americans will not be healthier and more financially secure,” he says.

 Fiesta notes, according to the U.S. Congressional Budget Office, in future years, the prices of additional drugs will be negotiated and Medicare will save about $ 100 billion over 10 years. 

While Biden and Democratic lawmakers see the value of granting Medicare the power to negotiate with Drug Companies to lower high drug costs,  no GOP lawmaker voted to pass Biden’s IRA last year, a proposal that allowed Medicare to negotiate with drug companies to lower the cost of drugs.

Not Everyone is On Board 

The drug price policies of IRA were the topic of a Sept. 20, 2023  hearing of the Oversight and Investigations Subcommittee of. House of Representatives’ Energy & Commerce Committee. The hearing, “At What Cost: Oversight of How the IRA’s Price Setting Scheme Means Fewer Cures for Patients,” GOP lawmakers sitting on the panel and four witnesses warned how the drug price negotiations could hurt or help market conditions for new medicines.

 At the hearing, House Energy and Commerce Committee Chair Cathy McMorris Rogers (R-WA) warned that the “Democrat’s drug pricing control scheme was going to do immense harm to patients by crushing drug innovation.  She charged that “unaccountable bureaucrats -not cutting-edge science- backed with entrepreneurial initiative- dictate the value of new cures.”

At press time, GOP lawmakers have remained silent as to their thoughts about last week’s announcement of Medicare lowering the drug prices for ten of the most expensive drugs in Medicare.  

But not President and CEO Steve Ubl – Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Steve Ubl quickly released a statement.

 “The administration is using the IRA’s price-setting scheme to drive political headlines, but patients will be disappointed when they find out what it means for them. There are no assurances patients will see lower out-of-pocket costs because the law did nothing to rein in abuses by insurance companies and PBMs who ultimately decide what medicines are covered and what patients pay at the pharmacy,” he said.

“As a result of the IRA, there are fewer Part D plans to choose from and premiums are going up. Meanwhile, insurers and PBMs are covering fewer medicines and say they intend to impose further coverage restrictions as the price-setting scheme is implemented. More than 3 million beneficiaries taking medicines with government-set prices will pay more in 2026,” adds Ubi.

Reflecting Roger’s opening hearing statement last year, Ubi noted: “The IRA also fundamentally alters the incentives for medicine development. Companies are already changing their research programs as a result of the law, and experts predict this will result in fewer treatments for cancer, mental health, rare diseases and other conditions. Medicine development is a long and complex process, and the negative implications of these changes will not be fully realized for decades to come.

“The ironically named Inflation Reduction Act is a bad deal being forced on American patients: higher costs, more frustrating insurance denials and fewer treatments and cures for our loved ones.” charges Ubi.

Following in PHARMA’s footsteps, drug companies also issued statements opposing the power given to Medicare to negotiate lower drug prices.  Novartis, manufacturer of Entresto, one of the 10 selected medicines participating in the price setting process issued a statement.   It called the negotiations “unconstitutional,” predicting “it would have long-lasting and devastating consequences for patients by limiting access to medicines now and in the future.”

Seniors Support Allowing Medicare to Negotiate Drug Costs 

As Congress began debated the merits of the IRA, a national poll of older Americans tracked wide-support for its provisions to reduce skyrocketing drug costs.

According to KFF Health Tracking Poll, a Oct. 12, 2021 poll, few accepted PHARMA and drug makers dire warnings that  high drug prices are necessary for supporting research into new drugs.  Giving the federal government the buying power to negotiate lower drug prices with drug makers and those enrolled in private plans were “favored by large majorities across the political partisans, even if they hear arguments from both sides,” said the San-Francisco-based  national newsroom that produces in-depth journalism about health issues.

KFF poll findings indicated that  83% of the public favor allowing the federal government to negotiate with drug companies to lower drug prices on behalf of people enrolled in Medicare beneficiaries and private plans. “This includes 91% of Democrats, 85% of independents, and 76% of Republicans, as well as majorities of seniors (84%), who would be most affected by such a provision, the findings indicate.

As older voters go to the polls, one thing is clear.  Lowering the cost of pharmaceuticals is a bipartisan issue.   When the dust settles after the November elections, those taking the reins of Congress must not forget this fact and continue to push for policies that will continue to work of IRA.

For fact sheet on Medicare Drug Price Negotiation Program, go to https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf