Biden Administration Slashes Medicare Drug Prices Ahead of 2024 Election

The Biden administration has successfully negotiated down the prices of 10 high-cost prescription drugs for Medicare by up to 79%, aiming to save $6 billion in the first year. This move, enabled by the Inflation Reduction Act, aims to alleviate Americans' concerns about soaring drug costs prior to the upcoming elections.

The Biden administration announced on Thursday its successful negotiations to reduce the costs of 10 high-selling prescription drugs for Medicare by up to 79%. This crucial move, expected to save $6 billion in the first year, targets alleviating public frustration over high drug prices ahead of the upcoming elections.

These reductions, enforced under the Inflation Reduction Act signed into law by President Biden in 2022, will officially start in 2026. While the slashed prices don't account for existing rebates, the administration estimates $1.5 billion in savings for Medicare beneficiaries' out-of-pocket costs. Notably, Merck & Co's diabetes drug Januvia will see the largest price cut of 79%.

Opposition from pharmaceutical companies has been strong, arguing that reducing drug prices might not significantly lower out-of-pocket costs for patients and could stifle innovation. However, government officials and analysts believe the cost reductions are a balanced approach to ensure both savings for patients and sustained innovation.

(With inputs from agencies.)