Monday, February 10, 2025

HHS Targets 15 Costly Drugs for Medicare Price Cuts

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The U.S. Department of Health and Human Services (HHS) has expanded its efforts to make prescription medications more affordable for seniors. By selecting 15 additional drugs for direct price negotiations under Medicare Part D, HHS aims to reduce the financial burden on millions of Medicare beneficiaries.

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Second Round of Negotiations Targets High-Cost Medications

Building on the successful first cycle of negotiations, the Centers for Medicare & Medicaid Services (CMS) identified 15 new drugs covered under Medicare Part D for price discussions. Scheduled for negotiation in 2025, any agreed-upon price reductions will take effect in 2027. These drugs, which are essential in treating conditions such as cancer, diabetes, and asthma, collectively accounted for approximately $41 billion in prescription costs from November 2023 to October 2024, representing about 14% of total Medicare Part D expenses.

Projected Savings and Future Initiatives

The initial negotiation phase resulted in significant savings, with the first 10 drugs seeing price reductions ranging from 38% to 79%, projected to save Medicare around $6 billion. For the selected 15 drugs, CMS anticipates similar outcomes, potentially saving seniors billions in out-of-pocket expenses. Looking ahead, CMS plans to negotiate up to 20 more drugs in subsequent cycles, further enhancing the affordability of essential medications for Medicare beneficiaries.

– In 2025, approximately 5.3 million Medicare Part D enrollees utilized the selected drugs.
– The 15 new drugs represent over one-third of the total prescription costs under Medicare Part D.
– Negotiated prices could lead to substantial reductions in both Medicare expenditures and individual out-of-pocket costs.
– The initiative aligns with the Inflation Reduction Act’s goals to lower healthcare costs for seniors.

Enhancing access to essential medications remains a cornerstone of HHS’s strategy to support the aging population. By systematically targeting high-cost drugs for price negotiations, CMS not only alleviates the financial strain on Medicare beneficiaries but also sets a precedent for future healthcare cost management. Subscribers can expect continued efforts to identify and negotiate prices for additional medications, ensuring sustained affordability and access to life-saving treatments.

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