The US government announced the reduced prices of 10 prescription drugs for Medicare users yesterday. The deal was the result of the first direct negotiations between drug companies and the agency following the passage of the 2022 Inflation Reduction Act.
The drugs treat a range of conditions from blood cancer to diabetes and are generally high-expense with no generic competitors. The new prices, reduced by nearly 80% in some instances (see list), will take effect in 2026. Officials project Medicare will save roughly $100B over five years, while individual users can expect a total of $1.5B in out-of-pocket cost savings via a potential $2,000 annual cap. The IRA stipulates a new crop of 15 to 20 drugs will be eligible for price negotiations annually.
Since 1960, US retail drug prices per capita have risen over 1,000%, adjusting for inflation. Costs in the US are nearly three times more than those in other high-income countries. Explore why here.
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