Medicare will save billions from its first-ever drug price negotiations with pharmaceutical companies

The first-ever talks between Medicare and pharmaceutical companies have yielded some positive change for Medicare expenditures, but how much older Americans will save remains uncertain. "The federal government released the new prices it will pay for 10 prescription drugs," reports Jared S. Hopkins of The Wall Street Journal. "The drugs, for serious conditions including cancer, diabetes and blood clots cost the government more than $50 billion a year altogether. . . . [But] they might not translate into much savings for many seniors."

The talks were Medicare's first foray using its massive consumer base to tamp down drug prices. "Lowering drug prices through negotiations is a milestone in years of efforts to give Medicare, the country’s biggest purchaser of prescription medicines, a power that private health plans have long deployed to keep a lid on rising drug costs," Hopkins explains. "It follows other new government measures tackling high drug prices, such as a $35 cap on how much Medicare members pay out of pocket for insulin."

Here are a few of the newly negotiated drug prices for a month’s supply compared to Medicare's 2023 list price for a 30-day supply. To read the full list, click here.

Eliquis, a blood thinner from Bristol-Myers Squibb and Pfizer: $231, down from $521;
Enbrel, an arthritis drug from Amgen: $2,355, down from $7,106;
Jardiance, a diabetes drug from Eli Lilly and Boehringer Ingelheim: $197, down from $573;
Stelara, a psoriasis drug from J&J: $4,695, down from $13,836;
Xarelto, a blood thinner from J&J: $197, down from $517.

Medicare's new prices will start in 2026. Anna Anderson-Cook and Richard G. Frank of Brookings report, "Using publicly-available data, estimate savings consistent with CMS reporting, find that 51.4% of the estimated savings ($3.28 billion) is accounted for by 3 drugs. Penn reports, "The negotiations will save nearly $100 billion by 2031, the Congressional Budget Office estimated."