Medicare price negotiations are now underway to address the rise in drug prices. On February 1st, the Biden Administration kicked off negotiations with drug companies for 10 widely prescribed drugs that treat conditions such as cancer, heart failure, stroke, diabetes and autoimmune disease. Officials estimate that initial offers will continue to be negotiated into the spring and summer months, with final prices set for September 1st. Assuming the agreed upon prices survive legal challenges, the goal is to implement them by January 2026.

Bipartisanship in Action
The Administration’s efforts to mitigate drug costs comes after a bipartisan desire to address the issue and willingness to negotiate with pharmaceutical companies to lower costs. Allowing Medicare to negotiate drug prices remains a bipartisan desire; the policy was included in the bipartisan Inflation Reduction Act passed by Congress in 2022. The Inflation Reduction Act sets another thirty drugs to be negotiated over the next two years for prices that will be rolled out in 2027 and 2028, respectively. Because of the prescription drug law, the Department of Health and Human Services can negotiate drug prices directly with drug companies to improve access to some of the costliest single-source brand-name Medicare Part B and Part D drugs. The Congressional Budget Office (CBO) estimates that the drug pricing provisions in the law will reduce the federal deficit by $237 billion dollars over 10 years (2022-2031).

There is Pushback
Drug-making companies, as well as other industry groups, have filed numerous lawsuits in federal courts throughout the United States. Their aim is to halt the initiative, arguing that the policy is unconstitutional for various reasons. Some companies have stated that they were forced to participate or otherwise face steep penalties or complete withdrawal from the Medicare and Medicaid markets.

Better Health Outcomes are at Stake
The United States often pays significantly more for prescription drugs than other developed countries. Addressing this disparity is seen as a way to bring the U.S. more in line with international standards and ensure fair pricing for American consumers, increasing access to medications. When people cannot afford their medications, they may skip doses or forgo treatment altogether, leading to worsened health outcomes and increased health care costs in the long run. Price negotiations for these drugs and full implementation of them will continue to face many challenges in the coming months ahead.

AHPA extends our gratitude to Kevin Lopez, guest author of this article.
Kevin is a graduate student in the Master of Healthcare Administration program at Loma Linda University.
Kevin received a Bachelor of Arts degree in Political Science and Government from Andrews University in 2022.