Diabetes Drugs, Blood Thinners Targeted for Medicare Price Cuts

The Centers for Medicare & Medicaid Services announced the first 10 drugs targeted for Medicare price cuts. Diabetes medications, blood thinners, and drugs for autoimmune conditions dominate the list.

The Inflation Reduction Act of 2022, signed into law by President Biden, allows Medicare to directly negotiate the prices of certain high-expenditure, single-source drugs without generic or biosimilar competition.

Medicare provides health insurance coverage to 65 million people in the United States (U.S.), including 57 million older adults, according to the Kaiser Family Foundation (KFF).

“Today, the Biden-Harris Administration is delivering on another significant milestone in implementing President Biden’s historic law to lower health care and prescription drug costs and ushering in a new era for American seniors,” the White House said in a statement.

The price cuts will come into effect in 2026, allowing lower out-of-pocket costs for seniors. The first ten drugs selected for negotiations are among those with the highest total spending in Medicare Part D and include:

Over the next 4 years, Medicare will negotiate prices for up to 60 drugs covered under Medicare Part D and Part B.

Several drug manufacturers, including Johnson & Johnson and Bristol-Myers Squibb, have already sued the U.S. government over Medicare's ability to negotiate drug prices, saying the new rules will limit patient access and choice.

According to a recent report from the U.S. Department of Health and Human Services (HHS), 9 million Medicare Part D enrollees paid a total of $3.4 billion in out-of-pocket costs in 2022 for the drugs selected for negotiation. For those without additional financial assistance, average annual out-of-pocket costs for these drugs were as high as $6,497 per enrollee last year.

About eight in ten American adults think the cost of prescription drugs is unreasonable, although the majority (65%) say affording these medications is easy, according to the KFF survey.

However, affordability is a more significant issue for 27% of American adults who take four or more prescription medications. Of those, 37% say they have difficulty affording their prescriptions, compared to 18% who currently take three or fewer prescription drugs.