Biden Administration Announces First Medicare-Negotiated Drug Prices

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Facts

  • On Thursday, the Biden administration revealed new prices negotiated between Medicare and pharmaceutical companies for 10 common medications used by older Americans, including widely used blood thinners and arthritis medications.[1]
  • The list of drugs includes Eliquis, which is used by nearly 4M Medicare enrollees for the treatment and prevention of blood clots; Jardiance, which is for heart failure, diabetes, and chronic kidney disease and is used by more than 1.5M enrollees; and Xarelto, another blood clot medication that's used by more than 1.3M enrollees.[2][3]
  • The discounts from this first-ever negotiation range from 38% to 79% of the medications' listed price, and the administration estimates the new prices could save taxpayers up to $6B, and save Medicare enrollees up to $1.5B overall.[4]
  • Medicare gained the power to negotiate drug prices as part of the Inflation Reduction Act, which Pres. Joe Biden signed in 2022 after Vice President Kamala Harris provided the tie-breaking vote to advance the bill in the Senate.[5]
  • The new prices will take effect in 2026, while 30 more drugs will be selected over the next two years for negotiation and rollout in 2027 and 2028.[5]
  • Some Republicans, however, have questioned the legal standing of the deal, with some saying that the administration is using federal funds to buy voters by providing an extra $15 per member monthly to insurers to make up for the companies raising insurance premiums.[6]

Sources: [1]New York Times, [2]The White House, [3]CNN, [4]Associated Press, [5]USA Today and [6]Newsweek.

Narratives

  • Democratic narrative, as provided by Rolling Stone. Finally, the US has joined the rest of the world and negotiated the prices of several medications. Now the users of these medications won't have to decide between paying the highest prices in the world for their drugs and paying for their families' basic needs. It's telling that pharmaceutical companies who are suing the government are also negotiating with the administration — even they know this is the best policy for all involved.
  • Republican narrative, as provided by FOX News. This program has already failed. In order to ease the burden of rising premiums that have resulted from the lowering of drug prices, the Biden administration is misusing taxpayer money. This is a blatant political move to pretend this plan is working and quell voters' concerns a few months before the election. This plan won't withstand the scrutiny of the courts.