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The Biden-Harris administration is expanding its drug price negotiation program, adding 15 widely used prescription medications to the list for price negotiations that will take effect in 2027. This move, authorized by the Inflation Reduction Act, targets high-cost drugs treating conditions like diabetes, heart failure, and autoimmune diseases, aiming to reduce out-of-pocket expenses for millions of seniors.
The Centers for Medicare & Medicaid Services (CMS) have confirmed the new list, which notably includes the popular diabetes and weight-loss drug Ozempic. Other selected medications treat chronic kidney disease, blood cancers, and psoriasis. According to government data, Medicare Part D enrollees spent over $26 billion in out-of-pocket costs on these 15 drugs alone between June 2022 and May 2023. The selection for 2027 includes several blockbuster drugs used by millions of Americans, representing a significant step in the program's expansion.
This initiative builds on the first round of negotiations, which targeted 10 drugs, including the blood thinner Eliquis and diabetes medication Jardiance. The lower prices for that initial group are set to take effect in 2026. For the first time, Medicare has the authority to directly broker lower prices with pharmaceutical manufacturers for drugs that lack generic or biosimilar competition. The CMS has already published details on the first ten selected drugs and their final negotiated prices for 2026.
The program has faced significant opposition from the pharmaceutical industry, which has filed multiple lawsuits arguing that the negotiation process amounts to unconstitutional price-setting that will harm innovation. However, the administration maintains that the program is crucial for improving the financial stability of Medicare and its beneficiaries. The official HHS announcement details the next steps for the negotiation process, which is expected to conclude with the publication of new maximum fair prices by November 2026. The program is slated to expand further, targeting up to 60 drugs by 2029.
