U.S. announces final drug prices after Medicare negotiations

The U.S. government announced on Thursday the final prices for the first 10 Medicare Part D drugs negotiated under the Biden administration’s Inflation Reduction Act.

According to the Centers for Medicare and Medicaid Services (CMS), which led the negotiations, Merck’s (NYSE:MRK) diabetes medication Januvia has faced a 79% price cut from the 2023 list price, marking the steepest discount in percentage terms.

Novo Nordisk’s (NVO) (OTCPK:NONOF) insulin therapy Fiasp followed with a 76% discount, while AstraZeneca’s (AZN) diabetes therapy Farxiga has faced a 68% cut.

Imbruvica, a blood cancer drug marketed by AbbVie (ABBV)/ J&J (JNJ); Entresto, a cardiovascular drug marketed by Novartis (NVS); and Eliquis, a blood thinner marketed by Bristol Myers (NYSE:BMY)/ Pfizer (NYSE:PFE), have faced 38%, 53%, and 56% cuts, respectively, the lowest in the list.

The program introduced in 2022 allowed the CMS to negotiate drug prices for Medicare Part D beneficiaries for the first time in history.

Before the announcement, government officials said the pricing negotiations would save U.S. taxpayers $6B in 2026 as the first set of revised prices takes effect for Medicare recipients, mostly Americans aged 65 and over.

In addition to taxpayer savings, the officials estimated that Medicare members would save $1.5B in out-of-pocket costs from prescription medicines that year.

In August, the Centers for Medicare and Medicaid Services (CMS) announced the first 10 Medicare Part D drugs it had selected for pricing negotiations, kicking off a lengthy bargaining process between the manufacturers and the CMS.

Blockbuster therapies from Bristol Myers (BMY), Pfizer (PFE), Eli Lilly (NYSE:LLY), AbbVie (ABBV), Johnson & Johnson (JNJ), Bayer (OTCPK:BAYZF), AstraZeneca (AZN), Novartis (NVS), Merck (MRK), Amgen (AMGN), and Novo Nordisk (NVO) (OTCPK:NONOF) were part of the list.