Starting in 2026, older Americans on Medicare who take 10 commonly prescribed medications, such as Xarelto and Eliquis, will receive discounts on these drugs. The Biden administration negotiated these discounts with pharmaceutical companies to save Medicare $6 billion and Medicare enrollees $1.5 billion in out-of-pocket costs. These discounts are part of the Inflation Reduction Act, which also allows Medicare to negotiate prices on a total of 40 drugs by 2028.
The legislation does not apply to most working-age Americans with employer health insurance, as employers typically negotiate lower drug prices. However, Medicare enrollees will also benefit from no-cost recommended vaccines and a cap on out-of-pocket expenses for insulin products and prescription drugs.
Although drug companies have filed lawsuits challenging the federal law, negotiations have not been stopped. The Pharmaceutical Research and Manufacturers of America have raised concerns about transparency and potential impacts on investments in research for lifesaving cures. Despite opposition, Sen. Amy Klobuchar emphasized that the law will provide financial relief to older Americans struggling to afford prescription drugs, as supported by over 70% of Americans.
Overall, the negotiated discounts on these widely prescribed medications are expected to provide significant cost savings for Medicare enrollees and show the Biden administration’s commitment to addressing the issue of high drug prices in the United States.
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