Senate Dems Enable Medicare to Negotiate (Some) Drug Prices
By Katherine Ellen Foley, David Lim, and Lauren Gardner
August 9, 2022
Senate Democrats pushed through a provision of the Inflation Reduction Act that would allow Medicare to negotiate prescription drug prices with drugmakers. The bill passed in a 51-50 vote Sunday morning. The section within the bill, which the House is expected to pass Friday, has been on the minds of lawmakers on both sides of the aisle in some form for more than a decade.
“This is a monumental step forward and tackling the costs of some of the most perniciously expensive prescription drugs in the Medicare program, drugs that have been on the market for substantial periods of time and yet don’t face any generic competition,” Sean Dickson, the director of health policy at the West Health Policy Center, a nonprofit organization focused on lowering health care costs, tells Katherine.
Negotiating will start with a narrow sliver of drugs: In 2026, Medicare will be able to negotiate the price of 10 predetermined prescription drugs patients can take at home. Those drugs, which fall under Medicare Part D, must have been on the market for at least nine years without any competition. The total annual amount the Centers for Medicare and Medicaid Services paid pharmacies most recently for the drugs will largely inform which products make the list. Then CMS and the drugmakers will negotiate the prices for the drugs that CMS will pay.
Medicare will add 15 more drugs to its negotiated list in next year and then again in the following year. In the third year, it will add 20 more drugs that, in some cases, may need a health care provider to administer. Drugs for which a generic comes to market will be removed from the list, and drug prices can be renegotiated if a drug reaches 13 years without a competitor.