US expects $6 bln savings from first Medicare drug price negotiations
By Patrick Wingrove and Trevor Hunnicutt
WASHINGTON, Aug 15 (Reuters) -The U.S. government will save $6 billion in the first year from lower prices the Biden administration negotiated on 10 top-selling prescription drugs for the Medicare health program for older Americans, officials said on Thursday.
President Joe Biden's signature Inflation Reduction Act, signed into law in 2022, allows Medicare to negotiate prices for some of the most costly drugs that the program covers for 66 million people. Those new prices, which will go into effect in 2026, are set to be unveiled later today.
The administration said people covered by Medicare, which mostly serves Americans aged 65 and over, would also save $1.5 billion in out-of-pocket costs for the prescription medicines that year. They include widely used diabetes treatments Januvia and Jardiance, blood thinners Eliquis and Xarelto and leukemia drug Imbruvica.
The officials did not provide further detail on the new prices nor say why the full $6 billion in savings would not be passed to patients.
The Democratic-run administration hopes the cost savings will ease Americans' anger about high prices, an issue they frequently say is their top concern headed into the closely contested Nov. 5 presidential election between Democratic Vice President Kamala Harris and Republican ex-President Donald Trump.
"Every American should be able to access the health care they need no matter their income or wealth," said Harris, who is holding events this week on her plans to cut costs.
Harris' tie-breaking Senate vote passed the law that allows for the drug-price negotiations, which no Republicans supported. In a statement, she also pointed to her work as California attorney general holding "big pharma accountable for their deceptive and illegal practices."
PRICE PAIN
More than half of voters in 2020 were over the age of 50, and healthcare consumes about 8% of Americans' spending, according to Pew Research Center and Labor Department data.
Inflation has ebbed, but higher prices since the COVID pandemic have left consumers smarting. Consumer prices rose 2.9% over the twelve months through July, and the category including prescription drugs gained roughly the same percentage.
U.S. health secretary Xavier Becerra characterized the negotiations with drugmakers as comprehensive and intense.
"After substantial back and forth, either we accepted an offer or a company accepted our offer," he said.
The administration released its list of the 10 costliest drugs to Medicare that would be subject to negotiations last year, with big-selling blood thinner Eliquis from Bristol Myers Squibb BMY.N and Pfizer PFE.N among them.
Merck & Co's MRK.N diabetes drug Januvia, Eliquis rival Xarelto from Johnson & Johnson JNJ.N and AbbVie's ABBV.N Imbruvica were also selected.
Other medicines picked for negotiations included Amgen's AMGN.O rheumatoid arthritis treatment Enbrel, Boehringer Ingelheim and Eli Lilly's LLY.N Jardiance, J&J's arthritis and Crohn's disease medicine Stelara and insulin from Novo Nordisk NOVOb.CO.
The pharmaceuticals industry has fought hard to block the Medicare negotiations, with several companies suing the administration and warning that they may have to curtail some drug development programs as a result.
Several of these drugmakers last month said they did not expect a significant impact on their businesses after seeing confidential prices from the government for their drugs that will take effect in 2026.
The next round of Medicare drug price talks are expected to include 15 further drugs and begin in February.
FACTBOX-Top Medicare drugs headed for price cuts nL1N3K115Q
Reporting by Patrick Wingrove and Trevor Hunnicutt; Editing by Stephen Coates
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