THURSDAY, Aug. 15, 2024 (HealthDay News) — The Biden administration announced Wednesday that it has signed deals with pharmaceutical companies that will lower the prices of 10 of the most popular and expensive medications used by American seniors.

White House officials said taxpayers should save $6 billion from the new prices, while seniors who use Medicare could save about $1.5 billion on their drugs. But administration officials did not provide details on how they arrived at those cost savings, which Related Press reported.

Still, the renegotiated prices are expected to lower the cost of drugs taken by millions of older Americans to treat diabetes and blood cancer and to prevent heart failure and blood clots.

These drugs include the blood thinners Xarelto and Eliquis, as well as the diabetes drugs Jardiance and Januvia, which AP reported. Medicare covered these drugs for $50 billion last year.

For decades, the federal government was prohibited from negotiating with pharmaceutical companies over the prices of their drugs, even though this is a routine procedure for insurance companies.

“That meant that pharmaceutical companies could basically charge whatever they wanted for life-saving treatments that people depend on, and all Americans paid the price for that,” White House adviser Neera Tanden told reporters on a conference call Wednesday evening. AP reported.

But in 2022, the Inflation Reduction Act changed all that by revising several Medicare prescription drug rules and allowing price negotiations.

Vice President Kamala Harris, who cast the deciding vote in passing the law, will announce the new drug prices on Thursday along with President Joe Biden. AP reported.

Meanwhile, the U.S. Centers for Medicare and Medicaid Services, which oversaw the deal, is expected to release final drug prices later Thursday. AP reported. The new prices will not come into effect until 2026.

The pharmaceutical industry reacted negatively to the new prices.

“The government is using the Inflation Reduction Act (IRA) pricing system to make political headlines, but patients will be disappointed when they learn what it means for them,” said Steve Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), in a statement released Wednesday. “There is no guarantee that patients will have lower out-of-pocket costs because the law has done nothing to curb abuse by insurance companies and PBMs (pharmacy benefit managers), who ultimately decide which drugs are covered and what patients pay at the pharmacy.”

In addition, “the IRA means there are fewer Part D plans to choose from and premiums are rising,” Ubl added. “Meanwhile, insurers and PBMs are covering fewer drugs and say they plan to impose further restrictions on coverage as the pricing system is implemented.”

More information

Medicare offers seniors additional options for assistance paying for prescription drugs.

SOURCE: Related press; PhRMA, Statement, August 14, 2024