The White House is touting an agreement it says will lead to lower prescription drug costs for seniors.

Officials announced Thursday that the Department of Health and Human Services has negotiated new Medicare prices for 10 common, high-cost drugs. The new prices, set to take effect in 2026, are expected to save seniors $1.5 billion in out-of-pocket costs and American taxpayers $6 billion.

The ability to negotiate drug prices under Medicare Part D comes from the Inflation Reduction Act, President Joe Biden’s signature climate, tax and health care bill, which he signed into law in 2022. That bill passed Congress with only Democratic votes.

“It’s a relief for the millions of seniors who take these drugs to treat heart failure, blood clots, diabetes, arthritis, Crohn’s disease and more – and it’s a relief for American taxpayers,” Biden said in a statement.

Democrats in Colorado welcomed the announcement.

“This is an important step forward in our fight to lower prescription drug costs so patients don’t have to pay out of pocket for the care they need,” Rep. Diana DeGette said on social media.

There is a delay between today’s announcement and the new drug prices coming into force.

The move is intended to give private insurers that offer Medicare benefits time to incorporate the prices into their plans, said Christen Linke Young, a health care adviser to the president.

“The key point here is that this is a really significant savings for seniors and the program, which puts a significant amount of money in people’s pockets because some of the most expensive drugs in the program are now much less expensive,” Linke Young told CPR News.

Medicare will be able to negotiate prices for 15 more drugs next year, and that number will grow in the future.

Negotiated drug prices (based on a 30-day supply)

• Eliquis is used to prevent and treat blood clots. Its price is currently $521 and is being reduced to $231.
• Jardiance is used to treat diabetes, heart failure and chronic kidney disease. Currently $573, will be reduced to $197
• Xarelto is used to prevent and treat blood clots. Its price is currently $517 and will be reduced to $197.
• Januvia is used to treat diabetes. Currently $527, will be reduced to $113
• Farxiga is used to treat diabetes, heart failure and chronic kidney disease. Currently $556, will be reduced to $178.50
• Entresto treats heart failure. Currently $628, will be reduced to $295
• Enbrel treats rheumatoid arthritis, psoriasis and psoriatic arthritis. Currently $7106, will be reduced to $2355
• Imbruvica treats blood cancer. Currently $14,934, reduced to $9,319.
• Stelara treats psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis. Currently $13,836, reduced to $4,695.
• Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill, for the treatment of diabetes. Currently $495, reduced to $119.

The pharmaceutical companies have tried in vain to challenge the cost-cutting negotiations.

During the debate on the Inflation Reduction Act, Republicans argued that it would cause pharmaceutical companies to stop investing in research and development of new drugs.

Pharmaceutical companies have also tried to end the program in court – but so far without success.

“There is nothing in the Constitution that prevents Medicare from negotiating affordable prices for prescription drugs,” Linke Young said. “We get the best deal for seniors, just like the VA does for beneficiaries and its programs, and just like Medicare does for every other type of health care service.”

The Congressional Budget Office estimates that Medicare drug price negotiations will save the government nearly $100 billion over the next decade.

This is the latest push by the Biden-Harris administration to lower prescription drug costs. The IRA recently capped the cost of insulin at $35 for Medicare Part D enrollees, and a $2,000 cap on out-of-pocket drug costs will take effect next year.