Starting in 2026, older Americans covered by Medicare who take common medications like Xarelto and Eliquis will see a reduction in the listed prices of these drugs.

On Thursday, the Biden administration announced that Medicare successfully negotiated discounts on 10 widely prescribed drugs for conditions such as diabetes, heart issues, cancer, and blood clots. The medications involved are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and the insulins Fiasp and NovoLog.

Officials from the administration did not specify the exact prices of these drugs after discounts take effect in 2026. However, they anticipate that these price negotiations will lead to a savings of $6 billion for Medicare in two years.

According to officials, Medicare beneficiaries can look forward to saving $1.5 billion in their out-of-pocket expenses.

Thanks to the Inflation Reduction Act, legislation passed in 2022, Medicare is now permitted to negotiate prices for a limited selection of drugs. An additional 30 medications will be chosen for price negotiations over the next two years, with changes expected in 2027 and 2028.

“This is the first time Medicare has engaged in direct negotiations with drug manufacturers, resulting in better outcomes for the American public,” stated Xavier Becerra, Secretary of Health and Human Services.

Vice President Kamala Harris, who cast the deciding vote in the Senate to pass the bill in 2022, is anticipated to highlight the savings for seniors during a campaign event on Thursday.

The negotiated discounts will primarily benefit older adults and will not be applicable to most working individuals with employer-based insurance. A study by KFF, a non-profit health policy organization, revealed that out of the 167 million Americans with employer health insurance, only 3.4 million were prescribed one of the 10 drugs negotiated by Medicare. Typically, employers negotiate better pricing for prescription drugs through their insurance plans and pharmacy managers.

Other features of the federal law will enable Medicare recipients to receive recommended vaccines at no cost and will cap out-of-pocket expenses at $35 for specific insulin medications. Furthermore, starting in 2025, individuals enrolled in Medicare’s Part D drug plans will see their annual out-of-pocket prescription costs limited to $2,000.

Pharmaceutical companies express concerns about delays in lifesaving treatments

Several lawsuits have been filed by drug companies and their industry partners challenging various components of the federal law. However, these legal battles have not halted the current negotiations.

The Pharmaceutical Research and Manufacturers of America, which represents drug manufacturers, has claimed that the government’s approach to enforcing price negotiations has been opaque, has disregarded patient feedback, and could jeopardize funding for crucial drug research. A survey conducted among PhRMA members found that 78% of them anticipated halting early-stage drug research efforts due to the new legislation.

Senator Amy Klobuchar from Minnesota remarked that the 2022 law will provide financial assistance to countless older Americans struggling with medicine expenses. In a press conference on Wednesday, she noted that over 70% of the public supports the idea of Medicare negotiating drug prices.

“They are trying to block us through legal action,” Klobuchar stated on Wednesday. “We are legally supported, we are factually supported, and we have the people’s support. We will make this happen.”