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Jimmy Williams
The Biden administration announced on Thursday that it has successfully negotiated lower prices for the 10 most expensive prescription drugs covered by Medicare, marking the first time the federal government has directly engaged in drug pricing negotiations.
The newly negotiated prices, which will take effect in 2026, could significantly reduce the financial burden on millions of older adults in the U.S. who rely on these medications.
This breakthrough is part of the federal government’s broader efforts to curb the rising cost of healthcare under the Inflation Reduction Act. The agreement, reached after months of intense negotiations, is expected to save Medicare enrollees $1.5 billion in out-of-pocket costs in its first year alone.
The drugs included in the negotiations and their new prices, based on a 30-day supply, are:
- Eliquis (Bristol Myers Squibb and Pfizer): $231, down from $521
- Xarelto (Johnson & Johnson): $197, down from $517
- Januvia (Merck): $113, down from $527
- Jardiance (Boehringer Ingelheim and Eli Lilly): $197, down from $573
- Enbrel (Amgen): $2,355, down from $7,106
- Imbruvica (AbbVie and Johnson & Johnson): $9,319, down from $14,934
- Farxiga (AstraZeneca): $178, down from $556
- Entresto (Novartis): $295, down from $628
- Stelara (J&J): $4,695, down from $13,836
- Fiasp and NovoLog (Novo Nordisk): $119, down from $495
While the list prices do not necessarily reflect what Medicare and its enrollees would have originally paid after rebates and discounts, the reductions are still significant. “These are pretty big discounts,” said Stacie Dusetzina, a health policy professor at Vanderbilt University. “It shows that they’re taking these negotiations very seriously and they’re trying to get much lower prices.”
Medicare, which provides health insurance coverage to more than 65 million people in the U.S., has long been restricted from negotiating drug prices directly with pharmaceutical companies. This recent change, driven by provisions in the Inflation Reduction Act, represents a landmark moment in the government’s approach to healthcare costs.
“This is a historic moment,” said White House domestic policy adviser Neera Tanden. “Millions of seniors and others on Medicare will soon see their drug costs go down on some of the most common and expensive drugs.”
The negotiations, which began in earnest in January, also promise significant savings for Medicare itself—projected at $6 billion in the first year. The Inflation Reduction Act has already brought other cost-saving measures to Medicare enrollees, including a $35 monthly cap on insulin out-of-pocket costs and an annual cap on overall prescription drug costs.
Health and Human Services Secretary Xavier Becerra, who oversaw the negotiations, described them as “intense,” highlighting the complexity and importance of reaching a fair agreement for both the government and drugmakers.
However, the pharmaceutical industry has pushed back against the lowered prices, with drugmakers arguing that such price controls could stifle innovation and development. The federal government will publish a detailed explanation of the negotiated prices by March 2025. Drugmakers that refused to negotiate faced potential tax penalties, although they had the option to withdraw their drugs from the Medicare program.
As the 2026 implementation date approaches, the Biden administration is expected to continue its focus on reducing healthcare costs for Americans, positioning the drug price negotiations as a key victory in their broader healthcare agenda.
