Medicare’s Historic Prescription Drug Price Negotiations

On August 29, 2023, the Biden administration announced the first 10 drugs whose prices will be negotiated with pharmaceutical companies through the Centers for Medicare & Medicaid Services (CMS). CMS' initial list features drugs that are among the most commonly used and highest in total spending in Medicare Part D, including treatments for blood clots (apixaban [Eliquis] and rivaroxaban [Xarelto]), diabetes (empagliflozin [Jardiance] and sitagliptin [Januvia]), cardiovascular disease, and cancer. Collectively, these 10 drugs cost CMS $50.5 billion between June 1, 2022, and May 31, 2023, and Medicare enrollees paid $3.4 billion in out-of-pocket costs in 2022. CMS will negotiate prices for up to 60 Medicare-covered drugs during the next 4 years and up to 20 additional drugs annually in subsequent years. Pharmaceutical companies filed multiple lawsuits challenging the lawfulness of Medicare price negotiations. This Viewpoint evaluates the legal claims and policy implications of historic drug price negotiations.