On October 10, it was announced all 10 drug companies selected for Medicare Drug Pricing Negotiations Program'sfirst cycle have opted to participate. These companies manufacture some of the most expensive and commonly used prescription drugs. These selected drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, representing about 20% of the total Part D gross covered prescription drug costs between June 1, 2022, and May 31, 2023. Medicare enrollees taking these 10 drugs paid a total of $3.4 billion in out-of-pocket costs in 2022.
The Inflation Reduction Act granted Medicare the authority to negotiate prescription drug prices for the first time, and negotiations with the drug companies manufacturing the selected drugs will occur throughout 2023 and 2024, with the negotiated prices taking effect in 2026. The negotiation process will consider factors like clinical benefit, unmet medical needs, and impact on Medicare recipients, aiming to provide access to life-saving treatments at lower costs to Medicare and taxpayers. Negotiated prices will be published by CMS by September 1, 2024, becoming effective on January 1, 2026, with plans to negotiate prices for more drugs in subsequent years as mandated by the Inflation Reduction Act.
View a fact sheet on the process for the first round of negotiations with participating manufacturers.