Understanding Medicare’s Negotiated Drug Prices: What Are The Real Savings?

In mid-August, the Biden administration announced it had completed negotiations for the first 10 drugs in Medicare’s price program and that the new prices will be implemented in 2026. The achievement marks decades of effort and is a stellar achievement for the Democrats and the administration. But Medicare already receives discounts and rebates on drugs, so it’s unclear what the savings will really be off the list price. And, as Stephanie Kennan points out, it is also unclear how much of any savings will filter through to patients because their costs will be determined by their insurance plans. Nor is it clear whether patients’ formularies will include the drugs whose prices were negotiated. Finally, Stephanie also describes how the Inflation Reduction Act fits into this landscape.

Episode 35: September 12, 2024

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