Drug Makers Agree to Negotiate With Medicare on Prices of 10 Medications
The manufacturers of 10 expensive medications have agreed to negotiate with the federal government for lower prices for Medicare recipients, the Biden administration announced on Tuesday.
The pharmaceutical companies said they would begin talks with the government even as several of them were suing the administration, arguing that the new law authorizing the negotiations — and steep potential penalties if drug makers opt out — is unconstitutional.
Karine Jean-Pierre, the White House press secretary, called the decision by the companies “another major step in President Biden’s fight to lower health care costs for seniors and families.”
The drug pricing program was created last year by Congress when it passed the Inflation Reduction Act, a signature legislative achievement for Mr. Biden. Medicare, the federal health insurance program for older and disabled people, had previously been barred by federal law from negotiating directly with drugmakers. The Congressional Budget Office projected that the price negotiation program would save the government about $100 billion over a decade.
The legal challenges to the law continue, and could still prevent lower prices from reaching consumers for months, if not years.
But Mr. Biden said in a video message posted to X, formerly known as Twitter, that Tuesday’s decision by the pharmaceutical companies showed that they were “taking steps to participate in the negotiation program so we can give seniors the best possible deal.”
He added: “For decades, drug companies in America made record profits while Big Pharma worked to block Medicare from being able to negotiate lower drug prices. In fact, America is now paying two to three times more than people in other countries for the exact same prescription drug made by the exact same company.”
The drug negotiation provision of the law backed by the president will be phased in over time if it survives legal challenges.
The first negotiations will be over 10 drugs selected by the administration, including blood thinners Eliquis and Xarelto and the diabetes drugs Jardiance and Januvia. The lower prices for those drugs are scheduled to go into effect at the beginning of 2026. Other drugs will be negotiated in the years that follow.
The 10 initial companies behind the selected drugs had been given a deadline of Oct. 1 to say whether or not they would participate in the negotiations while the legal challenges continued. Several of them had already announced that they would negotiate before the White House announcement.
Politically, Mr. Biden has used the drug negotiation provision in the law as a way of demonstrating his willingness to fight against big corporate interests on behalf of Americans who are struggling with high prices.
Last month at an event in Maryland, the president boasted about his achievements.
“I, along with your senators in Congress, have been trying for our whole careers to take on Big Pharma,” he said, saying the companies had long tried to intimidate lawmakers by spending hundreds of millions of dollars on lobbyists. “But guess what? It happened. We finally won.”
The White House has also used the issue to focus on the differences between Democrats and Republicans.
“Not a single solitary Republican voted for that,” Mr. Biden said in Maryland. “And now — and now they want to repeal it.”
