The first round of Medicare drug price negotiations will save an estimated $6 billion, according to the Biden administration.
Six months of negotiations for the first 10 drugs chosen by the program ended on Aug. 1 and agreements were reached for all of the medications according to White House officials.
"Because Medicare is now able to negotiate lower prescription drug prices for seniors, American taxpayers are expected to save $6 billion on these 10 drugs alone when the negotiated prices go into effect," White House domestic policy advisor Neera Tanden said in a briefing.
The figure was based on the potential savings that would have occurred had the negotiated prices been in effect in 2023. Senior White House officials said they don't expect the savings in 2026 to be "materially different" from those estimates. From that amount, Medicare enrollees are projected to save $1.5 billion when the prices go into effect in 2026.
The drugs were chosen for being among the highest total Part D gross covered prescription drug costs, an estimated $50.5 billion. The medications that were chosen treat conditions like heart failure, diabetes, rheumatoid arthritis and blood cancers.
Health and Human Services Secretary Xavier Becerra touted how the program exceeded initial estimates.
"The Congressional Budget Office predicted a $100 billion savings over 10 years from these drug negotiations, and they called or predicted at least a $3.7 billion savings in the first year alone. Today, we're announcing that in our first year of negotiations, we are saving Medicare $6 billion," he said.
"The negotiations were comprehensive. They were intense. It took both sides to reach a good deal," said Becerra. "The drug companies all agreed to participate. They had the opportunity to present their own proposed prices and to make counter offers throughout the negotiation. After substantial back and forth, either we accepted an offer, or a company accepted our offer. Ultimately, we reached an agreement on all 10 of the drugs."
Chiquita Brooks-LaSure, Administrator for the Centers for Medicare and Medicaid Services (CMS), proclaimed that the government had "achieved all of our goals" in the negotiating process.
"These negotiated prices are not just about costs. They are about helping to make sure that your aunt, your father, your grandfather or you can live longer and healthier. Today is a momentous day," said Brooks-LaSure.
Negotiations were marked by a slew of lawsuits filed by the pharmaceutical industry, seeking to halt the process and have it declared unconstitutional. During the talks, several of those lawsuits were dismissed, or federal judges ruled in favor of the government.
President Biden and Vice President Kamala Harris are expected to give remarks about the end of the negotiations Thursday.
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