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On Thursday, at an event in Largo, Maryland, President Joe Biden and Vice President Kamala Harris announced the cost savings from their plan to reduce the prices of 10 top-selling Medicare prescription drugs by as much as 79%, aiming to save $6 billion in the first year and address public concern over high prices ahead of the November elections. Biden's Inflation Reduction Act, signed into law in 2022, was the first to enable Medicare to negotiate prices for some of the most expensive drugs covered by the program for 66 million people. The newly announced price cuts are set to take effect in 2026. "We finally beat Big Pharma," Biden said at the Maryland event on Thursday alongside Harris. Though it was an official event, Biden turned his speech into a de facto campaign rally, praising Harris as someone who would make a "hell of a president" and criticizing Republicans for opposing Medicare's right to negotiate drug prices. The administration hopes these savings will alleviate Americans' frustration over high prices, a key concern as the closely contested Nov. 5 presidential election between Harris and former President Donald Trump approaches. "My entire career, I have worked to hold bad actors accountable and lower the cost of prescription drugs," Harris said at the event. "Medicare can use that [collective bargaining] power to go toe-to-toe with Big Pharma and negotiate lower drug pricing." Harris cast the tie-breaking Senate vote that passed the law enabling the drug price negotiations, a measure that received no Republican support. After the plan was announced, Republican House Speaker Mike Johnson (R-Lousiana) criticized it, saying, "Their prescription drug price-fixing scheme has accomplished just two things: driving up health care costs and crushing American innovation in medicine." The new prices reflect reductions in the list prices of drugs, not accounting for any existing rebates or discounts the government already receives. However, the government's estimated savings from the negotiations do factor in those discounts. The administration also said that Medicare beneficiaries, mostly Americans aged 65 and over, will save $1.5 billion in out-of-pocket costs for prescription medicines in 2026. According to the government, Merck & Co's diabetes drug Januvia will see the largest percentage cut at 79%, while Novo Nordisk's insulin aspart products will face a 76% reduction, the second steepest cut. The remaining eight drugs on the list will experience reductions ranging from 68% to 38%. Drugmakers have opposed the new discounts, claiming they may not lower out-of-pocket costs for patients and could impede future innovation. BMS, maker of the blood thinner Eliquis, said that the 56% price cut would not address the "biggest problem in patient affordability," which is the out-of-pocket costs set by health insurers and pharmacy benefit managers. Similarly, Johnson & Johnson, whose Crohn's disease medicine Stelara and blood thinner Xarelto will see list price cuts of 66% and 62%, respectively, said that patients will face higher costs due to these new price cuts. However, several drug makers stated last month that they do not anticipate a significant impact on their business after reviewing the confidential prices from the government. The next round of Medicare drug price negotiations, expected to start in February, will likely include 15 additional drugs.

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Biden Administration Unveils Major Medicare Drug Price Cuts

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