Come for the politics, stay for the snark.

Let’s delete this post and never speak of this again.

Maybe you would prefer that we take Joelle’s side in ALL CAPS?

“Can i answer the question? No you can not!”

Since when do we limit our critiques to things we could do better ourselves?

Baby steps, because the Republican Party is full of angry babies.

I did not have this on my fuck 2022 bingo card.

If West Virginia and San Francisco had a love child.

The willow is too close to the house.

One of our two political parties is a cult whose leader admires Vladimir Putin.

“But what about the lurkers?”

Let me file that under fuck it.

Putin must be throwing ketchup at the walls.

Why is it so hard for them to condemn hate?

And we’re all out of bubblegum.

Chutkan laughs. Lauro sits back down.

“Why isn’t this Snickers bar only a nickel?”

Marge, god is saying you’re stupid.

Well, whatever it is, it’s better than being a Republican.

When your entire life is steeped in white supremacy, equality feels like discrimination.

Cole, when it comes to calico cats, restraint is overrated.

I have other things to bitch about but those will have to wait.

They are lying in pursuit of an agenda.

“Joe Biden deserved better than he got from some folks in his own party.”

Never give a known liar the benefit of the doubt.

You are here: Home / Anderson On Health Insurance / IRA Medicare Drug Prices are out

IRA Medicare Drug Prices are out

by | 20 Comments

This post is in: 

This morning, the Center for Medicare and Medicaid Services (CMS) released the 2026 negotiated prices for 10 Medicare Part D drugs.  This is the first time that CMS can negotiate for drug prices as they were empowered by the Inflation Reduction Act (IRA).  The IRA has several substantial Medicare Part D changes and as full disclosure, I have a very interesting project and grant proposal that will be looking at one of these, unrelated Part D changes.

The results are substantial:

Estimated Medicare Net Savings in 2023:
Compared to 2023 Medicare spending net of all rebates and certain fees and payments, if the prices agreed to between CMS and participating drug companies under the Negotiation Program had been in effect during 2023, the negotiated prices would have saved an estimated $6 billion in net covered prescription drug costs, which would have represented 22% lower net spending in aggregate.

Projected Savings for People with Medicare Part D Coverage:
When the negotiated prices go into effect in 2026, people enrolled in Medicare prescription drug coverage would save under the projected defined standard benefit design an estimated $1.5 billion. These savings from the Negotiation Program are in addition to savings from other cost saving provisions in the Inflation Reduction Act, such as the first ever cap on out-of-pocket drug costs for people with Medicare.

The most important, long term policy implication of today is not the price reduction. Those are real. The important thing is that so far, the CMS authority to leverage massive market power to get big price concessions, even if those concessions are smaller than the headline number due to the net vs gross bubble problem, has survived every court challenge to it. Once the mechanism is validated and operationalized, expanding the mechanism becomes relatively straightforward.

Reader Interactions

20Comments

  2. 2.

    Mousebumples

    I’d have to check the details, but I feel like a number of these are going generic in 2026 or sooner.

    I’m also curious how much these prices match the “net cost” prices (eg cost minus rebates) offered in Medicare or other lines of business.

    An additional note – Novolog currently has a much lower list price, vs what is listed for 2023 comparison. Lower costs for insulin is good! Though that might be tied to the $35/mo insulin cap, and general shaming on pricing.

  3. 3.

    RaflW

    Seems like $1.5 Bn more money per year staying in the accounts of seniors is a big Biden deal. Dare I say, anti-inflationary even. Saving $4.5 Bn in taxpayer funding is nice, too. Just need to remind voters that this is the sort of thing Republicans want to slam shut asap.

  4. 4.

    Scout211

    The most important, long term policy implication of today is not the price reduction. Those are real. The important thing is that so far, the CMS authority to leverage massive market power to get big price concessions,

    Good point.  But from the perspective of Medicare patients, the negotiated lower prices are a big relief now  in 2026.

     

    Reposted from downstairs: Link

    Here are the negotiated prices for the drugs, based on a 30-day supply:

    Eliquis, a blood thinner from Bristol Myers Squibb and Pfizer: $231 negotiated price, down from $521 list price.

    Xarelto, a blood thinner from Johnson & Johnson; $197 negotiated price, down from $517 list price.

    Januvia, a diabetes drug from Merck: $113 negotiated price, down from $527 list price.

    Jardiance, a diabetes drug from Boehringer Ingelheim and Eli Lilly: $197 negotiated price, down from $573 list price.

    Enbrel, a rheumatoid arthritis drug from Amgen: $2,355 negotiated price, down from $7,106 list price.

    Imbruvica, a drug for blood cancers from AbbVie and Johnson & Johnson: $9,319 negotiated price, down from $14,934 list price.

    Farxiga, a drug for diabetes, heart failure and chronic kidney disease from AstraZeneca: $178 negotiated price, down from $556 list price.

    Entresto, a heart failure drug from Novartis: $295 negotiated price, down from $628 list price.

    Stelara, a drug for psoriasis and Crohn’s disease from J&J: $4,695 negotiated price, down from $13,836 list price.

    Fiasp and NovoLog, diabetes drugs from Novo Nordisk: $119 negotiated price, down from $495 list price.

    The new negotiated prices were compared to the 2023 list prices of the drugs.

  7. 7.

    Baud

    Posting here as well. Today.

    President Joe Biden and Vice President Kamala Harris are set to appear together in Maryland to discuss their plan to lower out-of-pocket costs for seniors on Medicare.

  9. 9.

    billcoop4

    Since I don’t take any of those (and will not start Medicare until next year), I don’t have skin in the game so that doesn’t matter to me.  /s

     

    Isn’t that the right reaction?  :)

     

    No — this is great news in many ways, especially hearing so-called free-marketers object about using the market to enact policy choices. This route should be done more often.

     

    BC

  10. 10.

    Anonymous At Work

    Holding my breath about whether these reductions can survive a Corner Post type challenge in 2026.  Some middle man [gender is sic] will decide that this is costing him money and sue to upend negotiated prices and the current SCOTUS has 6 votes for “private profits > general welfare”.  Alito and Thomas would snidely use “freedom of contract” as well.

  11. 11.

    bluefoot

    The important thing is that so far, the CMS authority to leverage massive market power to get big price concessions, even if those concessions are smaller than the headline number due to the net vs gross bubble problem, has survived every court challenge to it. Once the mechanism is validated and operationalized, expanding the mechanism becomes relatively straightforward.

    As I understand it, this is how drugs are cheaper in other countries. They negotiate prices with the pharma companies as an entire country so they have a lot of leverage. In effect, the US has been paying more to make up the difference. What I’m not clear on is the breakdown of the revenue here in the US: how much goes to PBMs and payers, how much goes to the pharma companies themselves, who else gets a slice of the pie.

  12. 12.

    TBone

    My hubby’s Part D provider (private insurance co.) raised his out of pocket cap so he will see no savings whatsoever.  Wily bastards.

  15. 15.

    Steve LaBonne

    I definitely look forward to paying less for my Jardiance! It’s been costing me around $300 for a 90 day refill.

  16. 16.

    Percysowner

    I see the Eliquis manufacturer is getting all upset about the pricing.

    Bristol Myers Squibb’s statement this morning: “The imposed ELIQUIS MFP does not reflect the substantial clinical and economic value of this essential medicine, which is widely recognized for its effectiveness in reducing stroke-related events, hospitalizations, and extended rehabilitation needs.”

    In other words, we are saving lives so we should be able to force them into poverty just to stay alive. My ex takes Eliquis and another very expensive drug (can’t remember the name) and his donut hole payment is killing him financially, but not taking the drugs will be killing him literally. The cap AND making the donut hole smaller is going to help him so much. But good lord, why is there a donut hole in the first place? Other than to save the insurance companies money.

  18. 18.

    Percysowner

     

    @Baud: Good to know. I misremembered that, mostly because I never come near it, so it isn’t something on my personal radar. That will help him so much.

  19. 19.

    TBone

    @Baud: my hubby’s provider started raising the cap when he got his first COLA bump up.  His cap was previously miniscule compared to now.  They got that started well before 2025 – we’ll see if they change their ways accordingly.

    I’m pretty sure they DGAF about legal.  Unless I raise a big stink about it.  And I have too much else to raise hell about, so that’s not on my radar.

    Also, two grand is a lot of money for a senior on a fixed income.

    I cover his expenses when he can’t, but we don’t tell anyone.  Oops.

  20. 20.

    stinger

    If I didn’t recognize all the drug names in that list, each one with a chipper melody in my ear, I might feel SLIGHTLY more sympathetic toward the drug companies. But they are creating and buying constant air time for commercials to market their drugs. “Ask your doctor about…” If they didn’t spend that money, they could charge less for their drugs.

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