The Centers for Medicare & Medicaid Services (CMS) have unveiled the list of negotiated prices for the first 10 drugs covered under Medicare Part D based on agreements reached between CMS and drug companies.
CMS sent initial offers for each drug back in February, and each manufacturer responded with a counteroffer. According to CMS, the agency held three meetings with each participating drug company to discuss the offers and counteroffers and attempt to agree on a mutually acceptable price for the drug. For five of the selected drugs, CMS and the drug company reached an agreement on a negotiated price in association with a negotiation meeting. For the remaining five drugs, CMS sent a written final offer and the drugmakers accepted the offer on or before the statutory deadline.
The prices, which range from 38-79% discounts off of list prices, will go into effect January 1, 2026. According to CMS, if the new prices had been in effect last year, Medicare would have saved an estimated $6 billion (22%) across the 10 selected drugs. People with Medicare prescription drug coverage are expected to see an estimated savings of $1.5 billion in out-of-pocket costs in 2026.
Passed into law in 2022, the IRA seeks to address inflation by potentially decreasing the federal government's budget deficit, decreasing the costs of prescription drugs, and directing investments toward domestic energy production. For drugmakers, the IRA states that drug manufacturers must pay a rebate to the federal government if the prices of certain drugs covered under Medicare Part B and most drugs under Part D rise at a rate that exceeds inflation.