The government announced on Tuesday, August 29, 2023 the first 10 prescription drugs that will be subject to price negotiations:
From June 1, 2022 through May 31, 2023, about 8,247,000 people with Medicare Part D coverage used these drugs, and it accounted for $50.5 billion in total Part D drug costs – that's about 20% of all drug costs in the Part D program.
Drug price negotiations are a key part of the Inflation Reduction Act, which was signed into law in August 2022. A portion of this act made pretty significant changes to Medicare Part D, which included these maximum fair price negotiations for selected prescription drugs.
The maximum fair prices for these first 10 drugs will go into effect in 2026. But it doesn't stop here – by February 1, 2025, CMS will announce 15 more Medicare Part D drugs for negotiation.
By November 30, CMS will publish the maximum fair prices for the 15 Medicare Part D drugs selected for negotiation earlier in the year. Maximum fair prices for these drugs will go into effect in 2027.
This will happen for several more years until the last round of drug prices go into effect in 2031.
So, what does all of this mean for your clients?
If all goes well, your clients should experience much lower out-of-pocket costs if they have prescriptions for any of these 10 drugs.
However, it's still unclear if the pharmaceutical companies will accept Medicare's proposed rates. The drug makers have 30 days to agree to participate, face steep excise taxes, or choose to not be a part of the Medicare program.
According to Politico, the pharmaceutical industry has sued and there are seven other pending lawsuits from drug companies and trade groups. There are speculations that many may end up in the Supreme Court.