HHS Releases Prices for Medicare Negotiated Drugs

The U.S. Department of Health and Human Services this morning released the prices for the first 10 drugs that have been negotiated for Medicare Part D. The new prices will go into effect beginning January 1, 2026. (Table below)

If the new prices had been in effect last year, Medicare would have saved about $6 billion, or 22%, on the 10 drugs. The negotiated prices range from 38% to 79% discounts off of list prices. About 9 million people with Medicare use at least one of the 10 drugs selected for negotiation, and these beneficiaries are expected to save an estimated savings of $1.5 billion in out-of-pocket costs in 2026.

“Congressional budget estimators (Congressional Budget Office) predicted about $100 billion savings over 10 years from drug negotiations, and a $3.7 billion savings in the first year alone,” HHS Secretary Xavier Becerra said in a news release.

The drug with the highest spending in Part D is the anticoagulant Eliquis (apixaban). Medicare spent $16.48 billion for the 3.7 million people who take Eliquis, the Center for Medicare and Medicaid Services has said previously.

The manufacturer of Eliquis, Bristol Myers Squibb, indicated in a statement that the Maximum Fair Price established through the negotiation “does not reflect the substantial clinical and economic value of this essential medicine, which is widely recognized for its effectiveness in reducing stroke-related events, hospitalizations, and extended rehabilitation needs.”

The BMS statement indicated that the price was imposed and doesn’t reflect what patients pay for Eliquis. “Insurance plans and their pharmacy benefit managers are ultimately responsible for what patients will pay for Eliquis, and the IRA does not protect patients from potential increases to their cost sharing or restrictions in access to Eliquis once the MFP goes into effect in January 2026. By focusing on government price setting, the IRA overlooks the biggest problem in patient affordability: how plans determine patient out-of-pocket costs.”

But CMS negotiated “in good faith on behalf of the millions of people who rely on these 10 drugs for their health and well-being. The new negotiated prices will bring much needed financial relief, affordability, and access,” Meena Seshamani, M.D., Ph.D., CMS Deputy administrator and director of the Center for Medicare, said in the news release.

In August 2023, HHS announced the first 10 drugs covered under Medicare Part D selected for the first cycle of negotiations under the Inflation Reduction Act (IRA) of 2022. The selected drugs accounted for $56.2 billion in total Medicare spending. Overall, total Part D gross spending for the 10 selected drugs more than doubled from 2018 to 2022, from about $20 billion to about $46 billion, an increase of 134 percent. Medicare enrollees paid a total of $3.4 billion in out-of-pocket costs in 2022 for these drugs.

CMS began the process of negotiating in February 2024 and met several times with manufacturers.

In 2022, about 7.7 million Medicare enrollees used one or more of the 10 drugs selected, which represents about 15% of all Medicare Part D enrollees, according to research report from the Office of the Assistant Secretary for Planning and Evaluation (ASPE), which is part of the U.S. Department of Health and Human Services. Spending on these 10 drugs grew more than three times as fast as the rate of growth in total spending on all Part D drugs.

Eliquis, Jardiance and Xarelto top the list for drugs with the highest Medicare spending. Between June 1, 2022, and May 31, 2023, Medicare’s Part D spending on Eliquis was $16.48 billion; Medicare spent $7.08 billion for Jardiance and $6.03 billion for Xarelto. Eliquis and Xarelto (rivaroxaban) both treat patients with atrial fibrillation, a common type of irregular heartbeat. Jardiance (empagliflozin) is used to treat patients with diabetes, heart failure and chronic kidney disease.

Center for Medicare and Medicaid Services