WASHINGTON, DC – This week, the Biden Administration announced that the manufacturers of all of the first 10 prescription drugs selected for Medicare's inaugural price negotiations have agreed to participate, clearing the way for talks that could lower Rx drug costs for seniors.

U.S. Senator Jack Reed, who helped pass the landmark Inflation Reduction Act (P.L. 117-169), granting the Centers for Medicare and Medicaid Services (CMS) the authority to use the purchasing power of Medicare to negotiate lower prices for consumers, cheered the news and says it will help lower costs in the future for seniors on fixed incomes.

“Overcoming decades of Republican obstruction and a multi-billion dollar lobbying campaign by Big Pharma, Democrats, led by President Biden, achieved a huge win for the American people that will help lower drug prices.  Using the purchasing power of Medicare to bargain for lower costs and get the best possible prices for taxpayers and consumers is commonsense, good government.  Businesses everywhere use this exact same principle themselves and anyone who has ever been to a warehouse store knows you can save when you buy in bulk.  It took years to win this fight, but big drug companies are finally coming to the table, reluctantly.  I urge CMS to use its authority to drive a hard, but fair bargain and ensure the American people get the best possible deal,” said Senator Reed.  “We’re making real progress when it comes to lowering prices for the necessities and medicines people rely on.  This step, and other key cost saving measures included in the Inflation Reduction Act, will result in lower prices for consumers.  It means lower out of pocket costs for people who depend on life-saving medicines.  And it will help put a stop to unchecked price gouging by Big Pharma.”

According to KFF Health News, four-in-10 insured adults say they skipped or delayed some type of health care in the past year due to cost.

Using the buying power of Medicare and Medicaid will allow the federal government to achieve significant savings for taxpayers, with the Congressional Budget Office (CBO) projecting it will save about $100 billion over a decade.

In August, CMS named the first 10 prescription drugs subject to price negotiations for the 65.7 million citizens covered by Medicare and the 94.1 million on Medicaid.  They include widely used medicines such as blood thinners, as well as drugs for arthritis, cancer, diabetes, and heart failure.  In order to be eligible for price negotiation, the Rx drugs must meet strict criteria, including being on the market for a number of years and having no competition from generic or biosimilar products.

If drug makers chose not to comply with the law, they would have faced the potential for steep fines or would have been forced withdraw their products from the Medicare and Medicaid markets.

Under the inflation Reduction Act, Medicare can negotiate the prices of more drugs each year.