After decades of failed attempts, Democrats this month passed legislation that aims to rein in the soaring costs of drugs for some in the United States.
That new bargaining power won’t kick in until 2025, when Medicare is able to haggle over the price of 10 drugs covered by its prescription plan. By 2029, Medicare will be able to negotiate the cost of as many as 60 drugs.
The savings are expected to be huge. The nonpartisan Congressional Budget Office estimates costs could fall by as much as $100 billion over the next decade.In the first year, Medicare will be allowed to negotiate the cost of 10 drugs it spends the most money on, as long as those drugs have been approved by the Food and Drug Administration for at least nine years and don’t have any rival generics on the market.
PhRMA, the trade organization that represents pharmaceutical companies, acknowledged it intends to push back against the law. The following year, out-of-pocket drug costs will be capped at $2,000 for Medicare Part D, which typically covers at-home prescription medications. A similar rule exists in Medicaid, so the Centers for Medicare and Medicaid has experience running this program, said Rachel Sachs, a professor of law at Washington University in St. Louis.Only Medicare patients will benefit directly from this. A move to include people on private insurance who are sold overpriced drugs in the calculation was scrubbed from the legislation.
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