The US government, under President Biden’s Inflation Reduction Act, has announced measures to reduce healthcare costs. The Department of Health and Human Services (HHS) will enable Medicare to negotiate lower drug prices through updated guidance from the Centers for Medicare & Medicaid Services (CMS). Medicare will begin direct negotiations with drug manufacturers in 2023, with the first ten drugs selected for negotiation to be revealed by September 1. The aim is to provide affordable access to life-saving treatments for Medicare beneficiaries.
The US government has taken significant steps to address the issue of high healthcare costs. The US Department of Health and Human Services (HHS) has recently announced a series of measures aimed at reducing these costs.
Under President Joe Biden’s Inflation Reduction Act (IRA), specific actions have been implemented to lower the prices of certain medications prescribed to senior citizens and individuals with disabilities. One key initiative involves the HHS introducing updated drug price negotiation guidance through the Centers for Medicare & Medicaid Services (CMS).
This guidance is an essential component of the IRA’s strategy, as it empowers Medicare to negotiate lower drug prices for its beneficiaries. HHS Secretary Xavier Becerra emphasized the administration’s commitment to delivering affordable drug costs to Americans and expressed determination in the face of potential opposition from pharmaceutical companies.
Starting in 2023, Medicare will directly engage in negotiations with drug manufacturers to lower the prices of expensive prescription drugs covered by its policies. By September 1, CMS will disclose the initial selection of ten drugs for negotiation. The negotiation process will occur in rounds throughout 2023 and 2024, with the reduced prices taking effect in 2026.
In March 2023, CMS released preliminary guidance outlining the drug price negotiation process. This guidance assists the agency in selecting drugs for negotiation and outlines the approach for conducting those negotiations. The updated guidance provides comprehensive details on how CMS will engage with manufacturers to establish a maximum fair price for selected drugs. The ultimate goal is to ensure that Medicare beneficiaries have access to new life-saving treatments at a more affordable cost.