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The Biden administration announced that Medicare’s newly negotiated prescription drug prices are expected to save the U.S. government $6 billion in the first year alone.
The lower prices, a result of the Inflation Reduction Act, aim to address the high costs of medications for the Medicare program, which serves 66 million older Americans.
The newly negotiated prices are slated to take effect in 2026 and are part of broader efforts to lower healthcare costs before the 2024 presidential election.
Also Read: Bristol Myers, Johnson & Johnson, AbbVie, AstraZeneca Expect Minimal Impact From Upcoming Medicare Price Negotiations.
Citing the administration officials, Reuters highlighted that these changes will reduce out-of-pocket expenses for Medicare recipients by an estimated $1.5 billion.
The drugs impacted include popular treatments such as Bristol Myers Squibb Co‘s (NYSE:BMY) Eliquis, Merck & Co Inc‘s (NYSE:MRK) Januvia, Johnson & Johnson’s (NYSE:JNJ) Imbruvica, and Eli Lilly And Co‘s (NYSE:LLY) Jardiance, among others.
Despite these savings, officials did not clarify why the $6 billion in government savings would not directly benefit patients.
Healthcare costs remain a critical concern for voters. Vice President Kamala Harris emphasized that access to affordable care should not depend on income or wealth.
The Democratic nominee for the 2024 presidential election has been actively promoting the cost-reduction measures, noting that her decisive vote in the Senate helped pass the law enabling Medicare to negotiate drug prices — a move opposed by Republicans.
Reuters report adds that although inflation has decreased since its pandemic peak, higher costs have continued to strain consumers, with prescription drug prices rising nearly 3% in the last year.
Despite the industry’s legal battles and warnings of potential impacts on drug development, several pharmaceutical companies have downplayed the negotiations’ financial effects after seeing the government’s confidential price proposals.
Looking ahead, the next round of negotiations will commence in February, targeting an additional 15 drugs.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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