Medicare secures billions in savings on prescriptions

The Department of Health and Human Services announced on Aug. 15 that it had negotiated agreements with multiple drug companies to lower the prices of 10 medications available through the Medicare program.

The new prices for the affected medications will be 38% to 79% lower than their list prices. The agency estimated that consumers with Medicare prescription drug coverage will save an estimated $1.5 billion in out-of-pocket expenses in 2026 as a result of the process.

“This historic milestone is only possible because of the Inflation Reduction Act, which passed with the leadership of Democrats in Congress, and with Vice President Harris casting the tie-breaking vote in the Senate – without a single Republican voting for it,” President Joe Biden said in a statement.

Vice President Kamala Harris said in a release that the newly lowered prices would be “life changing” for many and described the Inflation Reduction Act as instrumental in “helping millions of families get the care they deserve.”

“Empowering Medicare to negotiate prices not only strengthens the program for generations to come, but also puts a check on skyrocketing drug prices,” HHS Secretary Xavier Becerra said in a statement.

The drugs included are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Novolog. Among the conditions treated are diabetes, blood cancers, kidney disease, and blood clots.

HHS estimates that the new, lower prices will save the government money as well. The agency estimated that if the new prices had been in place in 2023, spending on the covered drugs would have been 22% lower, with costs cut by $6 billion.

In Wisconsin, over 1.2 million people are enrolled in the Medicare program.

All of the Republican members of Wisconsin’s congressional delegation voted against the Inflation Reduction Act in November 2021, while the state’s Democratic representatives voted for the bill.

When he was first campaigning for the presidency in 2016, former President Donald Trump promised to cut drug prices. However, following a meeting with pharmaceutical lobbyists in 2017 after he won the election, Trump said doing so was “price fixing” that would hurt drug companies.

Trump has also suggested cuts to the Medicare program.

“There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and the bad management of entitlements. There’s tremendous amounts of things and numbers of things you can do,” he told CNBC in March.

When he was president, Trump proposed cuts to Medicare. In his last budget, released in 2020, Trump proposed cutting an estimated $500 billion in cuts to the program.

Medicare has popular support among Americans. In a 2023 poll from KFF, 81% of respondents said they had a “favorable” or “somewhat favorable” opinion of the program. Support cut across party lines with more than 75% of Democrats, Republicans, and independents holding favorable views of Medicare.