Biden-Harris Administration Negotiates An Agreement To Lower Medicare Prescription Prices

August 16, 2024
The price reduction will save older adults billions.
The Biden-Harris administration announced on Aug. 15 that it reached an agreement with drug manufacturers to reduce the prices of ten prescription drugs under Medicare. 
“For far too long, Americans have paid more for their prescription drugs than any developed nation. Today, the Biden-Harris Administration is delivering on its promise to lower out-of-pocket drug costs for seniors and save money for Americans,“ the administration said in a press release.
When the new prices go into effect in 2026, Medicare patients will save an estimated $1.5 billion, according to the Center for Medicare and Medicaid Services. Some of the drugs included in the price reduction include the diabetes drug Januvia, which will be priced at $197—down from $527; Eliquis, a blood thinner from Bristol Myers Squibb; and Pfizer, which will drop from $521 to $231. Enbrel, a rheumatoid arthritis drug, will be reduced from $7106 to $2,355.
White House Domestic Policy Adviser Neera Tanden said this “historic moment” will result in big savings for older Americans.
“Millions of seniors and others on Medicare will soon see their drug costs go down on some of the most common and expensive drugs that treat heart disease, cancer, diabetes, blood costs, and more,” she said in a press conference. 
The negotiations, mandated under the Inflation Reduction Act, began in January. 
According to the release, the federal government will have until March 2025 to explain how it arrived at the negotiated prices. If a drugmaker declines to negotiate, they will receive a tax penalty. The penalty will be removed if the manufacturer removes their product from the Medicare program.
Pharmaceutical Research and Manufacturers of America issued a statement condemning the negotiations. 
“The administration is using the IRA’s (Inflation Reduction Act)  price-setting scheme to drive political headlines.”
Under the Inflation Reduction Act, negotiated prices will go into effect for 15 more drugs in 2026 and 15 more in 2027.
RELATED CONTENT: 3 Ways to Lower Your Medication Costs








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