The Biden administration just announced a deal with pharmaceutical companies to reduce the prices of Medicare’s costliest drugs.
Engy Ziedan, an economics professor at Tulane University, said the Inflation Reduction Act signed into law in 2022 helped set the stage for Thursday’s prescription drug deal.
“Medicare made an announcement with the Inflation Reduction Act that passed, that over the next few years, certain drugs are going to be negotiated in price,” Ziedan said.
Fast forward two years and the first ten drugs were just announced. The most common is Eliquis, a blood thinner that nearly four million Medicare enrollees use. In the new deal, the drug will see a 56% decrease in price.
“The price of it is going down from $521 to $231,” Ziedan said.
Along with blood thinners, drugs to treat diabetes and heart disease are also on the list, with reductions ranging between 38% and 79%.
“It’s going to lower prices if you have diabetes or heart disease,” Ziedan said.
These price reductions don’t kick in until 2026, but Utibe Essien, an assistant professor of medicine at UCLA, said that starting in 2025, a new rule takes effect, capping how much enrollees pay every year.
“Including a copayment limit that limits the copays at about $2,000 for Medicare enrollees,” Essien said.
Essien believes this will drastically help the 67 million people enrolled in Medicare, nearly 90% of whom are over the age of 65.
“People are saving up to thousands of dollars a month,” Essien said.
The Biden administration said these new prices are expected to save taxpayers $6 billion. However, the Associated Press reports that details on how those calculations were made have not been released.
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