Medicare’s First-Ever Price Negotiation Program
Medication costs have been rising steadily for years. Recently, prices have gotten so high that more people are struggling to afford the drugs they need for serious chronic conditions like diabetes and asthma.
This situation has struck seniors particularly hard, since they tend to have fixed incomes that leave no room for added costs. This demographic often has more than one condition, which could require various medications. The situation is so severe that many seniors split their doses or skip them to make the prescription last longer.
To address these issues, Congress passed the Inflation Reduction Act of 2022. But what exactly does this act offer, and what can it mean for you?
What Is the Inflation Reduction Act?
Before the Inflation Reduction Act, the government was prohibited from negotiating prices directly with manufacturers because, in 2003, when Medicare Part D was created, there was a provision in place called the noninterference clause. This clause prevented the Centers for Medicare and Medicaid Services from getting in the middle of negotiations between the manufacturers and Part D plan sponsors.
Years of debate followed, where Congress challenged whether the government should be granted the authority to negotiate prescription drug prices in Medicare.
In 2022, President Biden officially signed the Inflation Reduction Act into law. This law has a number of different provisions that address the rising inflation rates, including one important drug-related provision that can affect people who have Medicare.
Under this act, the Secretary of Health and Human Services must negotiate certain prescription drug prices with their manufacturers. The drugs impacted are some that are addressed under Medicare Part D.
The first round of negotiations for 10 drugs took place in 2024, and the second round was completed in January 2025. The second round involved the negotiation of 15 drugs, including some used to treat chronic obstructive pulmonary disease (COPD) and asthma, as well as Wegovy and Ozempic for the treatment of diabetes and obesity.
Projected Impact of the Inflation Reduction Act
The Inflation Reduction Act and subsequent negotiations have yielded results that are helping a large number of people save money on their prescriptions. One example is the reduction in price of Eliquis, which is a blood thinner. It used to have a list price of $521, according to the Center for Medicare Advocacy. Now, it’s $231.
This act is expected to save beneficiaries of Medicare (and Medicare itself) billions of dollars over the next few years. Additionally, the impact the act has on certain drugs will likely cause a ripple effect among manufacturers, leading to lower overall prices, even for medications that haven’t gone through the negotiation.
Drugs Under Medicare Negotiation
Under the Inflation Reduction Act, the Centers for Medicare and Medicaid Services (CMS) selected drugs for negotiation. They based this choice on high Medicare spending, lack of generic competition, and patient impact. Here’s a look at some of the medications already negotiated:
Round 1 (2024 – 10 Drugs)
- Eliquis
- Jardiance
- Xarelto
- Januvia
- Farxiga
- Entresto
- Enbrel
- Imbruvica
- Stelara
- Fiasp/Novolog
Round 2 (2025 – 15 Drugs)
- Ozempic, Rybelsus, Wegovy
- Trelegy Ellipta
- Xtandi
- Pomalyst
- Ibrance
- Ofev
- Linzess
- Calquence
- Austedo/Austedo XR
- Breo Ellipta
- Tradjenta
- Xifaxan
- Vraylar
- Janumet/Janumet XR
- Otezla
How Are Drugs Selected for Negotiation?
The CMS follows a detailed selection process to determine which drugs are eligible for Medicare price negotiation. The main factors are:
- Highest Total Medicare Spending: Drugs with the greatest cost to the Medicare program are prioritized.
- No Generic or Biosimilar Competition: Only single-source drugs that have no lower-cost alternative can be negotiated.
- Duration on Market: Small-molecule drugs must be on the market at least 7 years; biologics must be available for 11 years to be eligible.
- Coverage by Medicare Parts B or D: The drug must be covered by Medicare and widely used by beneficiaries.
- Therapeutic Value & Usage: Frequently prescribed drugs for chronic, high-impact conditions are more likely to be considered first.
Why the Inflation Reduction Act May Not Be Enough
One of the main concerns about this act is that it doesn’t address nearly enough medications. Too many drugs are not eligible to go through the negotiation process.
The Centers for Medicare and Medicaid Services uses a selection process that excludes two-thirds of the drugs that Medicare Parts B and D cover. Too many people are still struggling with impossibly high drug prices because of this.
Also, pharmaceutical companies may take steps to make up for the lost profits with other medications. There have already been increased prices in some of those drugs that are excluded from negotiations.
Another problem is that the way the selection of the drugs happens now, small-molecule medications can be eligible for negotiation seven years after their first FDA approval. Biological products, however, are eligible after 11 years.
That incentivizes pharmaceutical companies to focus on biological products. It could lead to fewer of certain types of medications, which won’t help with prices.
Options for Patients And How Simplefill Can Help
People who are struggling to afford their medications and whose drugs are not impacted by the Inflation Reduction Act still have ways of better affording their prescriptions. This can be done through prescription assistance programs.
These programs help patients find the savings they may be eligible for. There are numerous options, however, and the application processes can be elaborate. It’s also very easy to be rejected if you make any kind of error when enrolling.
That is where Simplefill can help. Our team finds the various programs you may benefit from based on your needs and circumstances, and we do all of the applying for you. Because we know how the system works, we can increase your chances of being accepted so you can receive the savings you deserve.
Get Affordable Access to Prescription Medications
Simplefill is a full-service prescription assistance company that researches, qualifies, and maintains patients’ enrollment in all sources of assistance available to them.
Apply today by calling 877-386-0206. A caring Simplefill representative will contact you within 24 hours to discuss your application and, if qualified, enroll you in the program.
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