HHS Selects 15 New Drugs for Medicare Part D Price Negotiations

Image Credit: Adobe Stock Images/Sherry Young

The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced that 15 new drugs that are currently covered under Medicare Part D will be selected for price negotiations. According to the federal agency, the move is part of the Inflation Reduction Act’s (IRA) aim to lower prescription drug costs for seniors.¹

“Last year we proved that negotiating for lower drug prices works. Now we plan to build on that record by negotiating for lower prices for 15 additional important drugs for seniors,” said Xavier Becerra, HHS Secretary. “Today’s announcement is pivotal—the Inflation Reduction Act is lowering prices for people on Medicare. HHS will continue negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs.”

Negotiations with drug manufacturers, which are expected to begin this year, will take effect in 2027. HHS stated that the drugs, which include treatments for cancer, diabetes, and asthma, accounted for approximately $41 billion in gross prescription costs between November 2023 and October 2024, representing 14% of Medicare Part D spending. HHS also said that over one-third of Medicare Part D’s total drug spending is targeted when combined with the 10 drugs selected in the first negotiation cycle.

The drugs selected for the second cycle include Ozempic; Rybelsus; Wegovy; Trelegy Ellipta; Xtandi; Pomalyst; Ibrance; Ofev; Linzess; Calquence; Austedo; Austedo XR; Breo Ellipta; Tradjenta; Xifaxan; Vraylar; Janumet; Janumet XR; and Otezla. The manufacturers of the drugs will have until February 28, 2025, to make a decision on negotiations. As part of negotiations, CMS will evaluate preclinical benefits of the drugs, how much they support unmet clinical needs, and their impact on particular populations.

HHS also highlighted the program’s success in reducing costs and expanding access, with CMS factoring clinical benefits, unmet medical needs, and production costs into negotiations. CMS data found that the first cycle of negotiations achieved price reductions between 38% and 79%, which would have saved $6 million in 2023 had it gone into effect sooner.

Further, CMS noted the upcoming $2,000 annual out-of-pocket cap for Medicare Part D enrollees in 2025, which they project will save 11 million beneficiaries an estimated $600 per enrollee. The government agency also stated that for those who do not receive financial assistance, savings of $1,100 per enrollee are expected.¹

In August 2023, HHS announced the first 10 drugs that Medicare would be able to negotiate the prices of through the IRA. These included Eliquis; Jardiance; Xarelto; Januvia; Farxiga; Entresto; Enbrel; Imbruvica; Stelara; Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; and NovoLog PenFill. According to HHS, these drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs between June 1, 2022, and May 31, 2023.²

“The Biden-Harris Administration continues to make history by announcing the latest round of drugs selected for the Medicare Drug Price Negotiation Program, with the goal of improving access to some of the costliest drugs while saving the American people billions of dollars,” said Chiquita Brooks-LaSure, CMS Administrator, in the press release. “Improving prescription drug affordability for Medicare enrollees is the core of the Inflation Reduction Act, and the next cycle of negotiations will continue to strengthen Medicare for generations to come.”

For the upcoming third cycle, CMS is expected to select up to 15 prescription drugs for negotiation and potentially up to 20 for all cycles after that.¹

References

1. HHS Announces 15 Additional Drugs Selected for Medicare Drug Price Negotiations in Continued Effort to Lower Prescription Drug Costs for Seniors. CMS. January 17, 2025. Accessed January 17, 2025. https://www.cms.gov/newsroom/press-releases/hhs-announces-15-additional-drugs-selected-medicare-drug-price-negotiations-continued-effort-lower

2. HHS Selects the First Drugs for Medicare Drug Price Negotiation. HHS. August 29, 2023. Accessed January 17, 2025. https://public3.pagefreezer.com/browse/HHS.gov/02-01-2024T03:56/https://www.hhs.gov/about/news/2023/08/29/hhs-selects-the-first-drugs-for-medicare-drug-price-negotiation.html