WASHINGTON — The Biden administration is taking a victory lap after federal officials struck deals with pharmaceutical companies to fix the price for 10 of Medicare insurance the most popular and expensive medications, but provided few direct details about the new price older Americans will pay when picking up these prescriptions.
White House officials said Wednesday night that they expect U.S. taxpayers to save $6 billion on the new prices, while older Americans could save about $1.5 billion on their prescription drugs. However, those projections were based on outdated estimates, and the administration did not share details about how it arrived at the figures.
Still, the newly negotiated prices — still elusive to the public early Thursday morning — will affect the price of drugs used by millions of older Americans to treat diabetes and blood cancer and prevent heart failure or blood clots.
The drugs include the blood thinners Xarelto and Eliquis and the diabetes drugs Jardiance and Januvia. Medicare spent Last year, $50 billion was spent on medicine.
It’s a milestone for the Medicare program, which provides health care to more than 67 million older and disabled Americans. For decades, the federal government was prohibited from negotiating the price of their drugs with pharmaceutical companies, even though it’s a routine process for private insurers.
“This meant that pharmaceutical companies could essentially charge whatever they wanted for life-saving treatments that people rely on, and all Americans paid the price,” White House adviser Neera Tanden told reporters on a call Wednesday night.
The drug deals become a focus for the vice president Kamala Harris’ presidential campaign, especially since she cast the deciding vote to pass the law. She will join President Joe Biden Thursday to announce drug prices, their first joint speech since she replaced him as leader of the Democratic ticket, as both parties try to convince voters that costs will fall after years of above-average inflation.
The couple last appeared together in public to welcome Americans to the US locked up in Russia who were released earlier this month as part of a large-scale prisoner swap.
Powerful pharmaceutical companies tried unsuccessfully to sue to stop the negotiations, which became law in 2022 when a Democratic-controlled Congress passed the Inflation Reduction Act, which overhauled several Medicare prescription drug policies. But executives from those companies have also hinted during earnings calls in recent weeks that they don’t expect the negotiations to affect their bottom lines.
The Centers for Medicare and Medicaid Services, which oversaw the dealmaking, is expected to announce final drug prices later Thursday. The new prices won’t take effect until 2026. Next year, the Department of Health and Human Services could select another 15 drugs for price negotiations.
Before drug prices were finally set, the Congressional Budget Office estimated The negotiations could save the federal government $25 billion by 2031.
The official meeting comes a day before Harris is scheduled to unveil part of her economic agenda in North Carolina on Friday, which aims to roll out other ways to lower costs and raise middle-class incomes.