Beginning in 2026, older Americans on Medicare will receive discounts on 10 widely-prescribed drugs such as Xarelto and Eliquis. The Biden administration has negotiated lower prices with pharmaceutical companies for medications used to treat blood clots, cancer, heart disease, and diabetes. These drugs include Eliquis, Jardiance, Xarelto, and more. It is estimated that these negotiations will save Medicare $6 billion and enrollees can expect to save $1.5 billion in out-of-pocket costs.
Under President Joe Biden’s Inflation Reduction Act, Medicare can now negotiate prices with pharmaceutical companies on a limited number of medications. Another 30 drugs will be selected for negotiation over the next two years, with discounts being rolled out in 2027 and 2028. The discounts will not apply to most working-age Americans covered by employer health insurance, as employers typically negotiate for lower-cost prescription drugs.
The federal law also allows Medicare enrollees to receive recommended vaccines with no cost-sharing and limits out-of-pocket costs on insulin products. In 2025, Part D drug plan enrollees will have out-of-pocket expenses for prescriptions capped at $2,000 a year.
While drug companies and their industry allies have filed lawsuits challenging aspects of the federal law, negotiations with pharmaceutical companies have not been halted. The Pharmaceutical Research and Manufacturers of America argue that the federal efforts lack transparency and could reduce investments in lifesaving cures. However, Senator Amy Klobuchar believes that the law will provide financial relief to millions of older Americans struggling to afford prescription drugs, with the majority of Americans supporting Medicare drug price negotiations.
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