The United States has successfully negotiated price reductions of up to 79% for 10 top-selling prescription drugs covered by Medicare, aiming to save $6 billion in the first year alone. This effort, part of President Joe Biden’s broader plan to address high drug prices, was celebrated on Thursday by Biden, who highlighted it as a key achievement of his administration ahead of the November elections.
The price negotiations are a result of the Inflation Reduction Act, signed into law by Biden in 2022. This landmark legislation allows Medicare, for the first time, to negotiate prices for some of the most expensive drugs it covers for 66 million beneficiaries. The newly negotiated prices will take effect in 2026.
“We finally beat Big Pharma,” Biden declared at an event in Largo, Maryland, where he was joined by Vice President Kamala Harris. The administration is hopeful that these savings will address widespread frustration over high drug costs, a top concern for many Americans as the closely contested November 5 presidential election approaches, pitting Harris against Republican former President Donald Trump.
“My entire career, I have worked to hold bad actors accountable and lower the cost of prescription drugs,” Harris said. “Medicare can use that (collective bargaining) power to go toe-to-toe with Big Pharma and negotiate lower drug prices.”
The new prices reflect reductions to the list prices of these drugs, although the estimated savings already account for any rebates and discounts the government currently receives. Harris played a pivotal role in passing the law that enabled these negotiations, casting the tie-breaking Senate vote, with no Republican support. She also pointed to her past efforts as California attorney general in holding pharmaceutical companies accountable for deceptive practices.
Although the event was official, Biden turned his speech into a campaign rally, praising Harris as someone who would make a “hell of a president” and criticizing Republicans for opposing Medicare’s right to negotiate drug prices. Republican House leaders, including Speaker Mike Johnson, condemned the negotiations as “price fixing,” arguing that the policy would increase healthcare costs and stifle medical innovation.
The administration estimates that Medicare beneficiaries, primarily those aged 65 and older, will save $1.5 billion in out-of-pocket costs for these medications in 2026. Among the drugs facing the steepest cuts is Merck & Co.’s diabetes drug Januvia, which will see a 79% price reduction. Novo Nordisk’s insulin aspart products will face the second-largest cut at 76%. The other eight drugs on the list will see price reductions ranging from 68% to 38%.