Updates

In our September 2023 Policy Analysis, we reported that Medicare had chosen 10 brand name prescription drugs for its new price negotiation system. The negotiations for the first year, 2026, are now completed despite numerous pending lawsuits filed by drug manufacturers. The Biden administration has announced the results of the negotiation, touting total savings of $6 billion, or 22% of spending, for the 10 drugs, with beneficiary out-of-pocket savings estimated at $1.5 billion. The next set of annual negotiations, for 2027, will add 15 more drugs to the list. The same number will be added in 2028, and subsequently, 20 more will be added each year beginning in 2029. According to an analysis from researchers at the Kaiser Family Foundation, “the negotiated drug prices have a Goldilocks feel – big enough to achieve meaningful savings, but not so big to drive pharmaceutical companies to pull out of the program or to seriously threaten their profits.”