(TotalConservative.com) – Ten pharmaceutical companies agreed to the first round of pricing negotiations with Medicare, according to an announcement from the Biden administration. The move would fill a campaign promise by President Biden to lower the cost of prescription drugs, making them more affordable for aging Americans on a limited budget.
The price reductions being discussed are for some of the most common and expensive medications. They treat a range of conditions from heart problems, to digestive disease, and diabetes. Many Americans are having trouble affording the medications.
The companies that agreed to participate are some of the largest drug companies in the world. They include Merck Sharp Dohme, Novartis, AstraZeneca, Jannsen Biotech, and others. Together they took in over $50 billion from taxpayers covering “Part D” prescriptions between June 1st, 2022, and May 31st, 2023. That’s in addition to the consumers themselves paying $3.4 billion out-of-pocket, according to the Department of Health and Human Services (HHS).
The companies agreed to participate in the price-negotiation process with the caveat that any agreed-upon changes for Medicare recipients will not be enacted until January 1st, 2026.
The pricing program is one of the outcomes of the Inflation Reduction Act of 2022. That legislation granted Medicare authority to negotiate drug pricing with manufacturers. There was an additional pressure to maintain drug costs as inflation continued to rise leading to a subsection in the legislation that mandated commercial insurance providers to cover any additional costs if the price of a medicine rises faster than background inflation.
Johnson & Johnson in tandem with Merck filed several lawsuits challenging the constitutionality of Biden’s program. Negotiations should conclude with new pricing being announced by September 2024. After that, negotiations will continue with new drugs and pricing being added to the list for price reductions in 2027 and 2028.
The program will continue to add 20 drugs to the list per year, as long as the Inflation Reduction Act is still in effect.
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