The government announced final prices on Thursday for the first 10 drugs negotiated by Medicare under the Inflation Reduction Act, following months of back-and-forth between pharma companies and the government.
The negotiated prices announced by the US are as follows:
Earlier Thursday, the administration announced that the law would save taxpayers $6 billion in 2026 and that patients would see about $1.5 billion in out-of-pocket savings.
The negotiated prices will take effect in 2026 for Medicare’s drug benefit, which covers about 50 million people, mostly senior citizens.
But it may be hard, at least immediately, to know how much the government saved on a drug-by-drug basis. Medicare’s drug benefit is run by private insurance plans, which negotiate rebates and discounts on their own — what’s known as the net price.
“The negotiations were comprehensive. They were intense. It took both sides to reach a good deal,” HHS Secretary Xavier Becerra told reporters.
Pharmaceutical companies have heavily criticized the negotiation process, likening it to price setting, and several have sued to block it. However, a handful of drugmakers emphasized on recent earnings calls that they’ve already factored negotiations into their near-term guidance.
“Now that we have seen the final price, we’re increasingly confident in our ability to navigate the impact of IRA on Eliquis,” Bristol Myers CEO Chris Boerner said on the company’s earnings call last month, speaking about the company’s blockbuster blood thinner.
AstraZeneca’s biopharma business unit head Ruud Dobber said in July that “even with modeling that impact, we still expect to deliver on our long-term outlook.”
Seven of the companies filed lawsuits, and five of those — from Bristol Myers, Boehringer Ingelheim, Johnson & Johnson, AstraZeneca and Novo Nordisk — have been rejected in federal courts. Those companies have all appealed.