The Biden administration has picked the first 10 high-priced prescription drugs subject to federal price negotiations, taking a swipe at the powerful pharmaceutical industry. It marks a major turning point in a long-fought battle to control ever-rising drug prices for seniors and, eventually, other Americans.
Under the 2022 Inflation Reduction Act, Congress gave the federal government the power to negotiate prices for certain high-cost drugs under Medicare. The list of drugs selected by the Centers for Medicare & Medicaid Services (CMS) will grow over time.
The first eligible drugs treat diabetes, blood clots, blood cancers, arthritis and heart disease — and accounted for about $50 billion in spending from June 2022 to May 2023.
The United States is clearly an outlier on drug costs, with drugmakers charging Americans many times more than residents of other countries “simply because they could,” Biden said Tuesday at the White House. “I think it’s outrageous. That’s why these negotiations matter.”
He added, “We’re going to keep standing up to Big Pharma and we’re not going to back down.”
Democratic lawmakers cheered the announcement and the pharmaceutical industry, which has filed a raft of lawsuits against the law, condemned it.
The companies have until Oct. 2 to present data on their drugs to CMS, which will make initial price offers in February, setting off negotiations set to end next August. The prices would go into effect in January 2026.
Here are five things to know about the impact:
1. How important is this step?
Medicare has long been in control of the prices for its services, setting physician payments and hospital payments for about 65 million Medicare beneficiaries. But it was previously prohibited from involvement in pricing prescription drugs, which it started covering in 2006.
Until now the drug industry has successfully fought off price negotiations with Washington, although in most of the rest of the world governments set prices for…
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