CMS Announces Negotiated Medicare Prices for First 10 Drugs

Negotiated prices for the first 10 drugs selected for review by the Biden-Harris Administration were revealed Thursday by the Centers for Medicare & Medicaid Services (CMS), representing the first time the US government has reached such an agreement with drug manufacturers.

The lower prices, which will take effect for patients with Medicare Part D prescription drug coverage in January 2026, are a result of the 2022 Inflation Reduction Act (IRA) and include commonly used but expensive drugs that treat a variety of conditions such as diabetes, heart failure, chronic kidney disease, CAD, peripheral artery disease, psoriasis, and blood cancers.

In a press release and fact sheet published this week, CMS reported savings that range from 38%-79% off the manufacturers’ 2023 list prices for a 30-day supply of the drugs.

Drug Prices for a 30-Day Supply

However, as reported by STAT News, Medicare does not pay list price for drugs, so the savings might not be as high as CMS is touting.

In total, Medicare spent $56.2 billion on these 10 drugs in 2023, accounting for about 20% of total Part D gross spending that year. Moreover, in 2022 Medicare recipients paid $3.4 billion in out-of-pocket costs for them. CMS estimates that the negotiated prices will save the agency about $6 billion and Medicare enrollees about $1.5 billion each year.

“Americans pay too much for their prescription drugs. That makes today’s announcement historic. For the first time ever, Medicare negotiated directly with drug companies and the American people are better off for it,” US Department of Health and Human Services Secretary Xavier Becerra said in a press release. “Empowering Medicare to negotiate prices not only strengthens the program for generations to come, but also puts a check on skyrocketing drug prices.”

CMS plans to choose up to 15 more drugs covered under Part D for which the agency will negotiate prices for 2027. After that, the IRA requires CMS to do the same for up to 15 more drugs covered by Part B or Part D for 2028 and up to 20 more for each impending year.

“We believe all patients should have access to all approved prescription drugs with scientific evidence of clinical benefit or guideline-directed medical therapy,” William Van Decker, MD (Lewis Katz School of Medicine at Temple University, Philadelphia, PA), chair of the American College of Cardiology Health Affairs Committee, told TCTMD in an email. “Some of the medications included in the announcement by CMS have the potential to significantly impact heart disease patients. We hope to see a positive impact on our patients and will continue to advocate for affordable access to all.”