Opinion: The Inflation Reduction Act’s drug price negotiations is saving taxpayers billions

In this op-ed, Melissa Herd, Region 3 Director of the U.S. Department of Health and Human Services, explains how the Biden-Harris Administration’s Inflation Reduction Act allows Medicare to negotiate lower prices for 10 prescription drugs, potentially saving billions for taxpayers and Medicare enrollees, with the new prices taking effect on January 1, 2026. 

President Joe Biden says that the ability to afford needed medicines is about dignity, hope, and fairness. Those words embody the Biden-Harris Administration’s work to implement the President’s lower cost prescription drug law, also known as the Inflation Reduction Act. 

This month marks a historic milestone, as the Biden-Harris Administration announced new, lower prices for 10 drugs selected for the first cycle of Medicare drug price negotiations.

As Regional Director at the U.S. Department of Health and Human Services (HHS), part of my job is to spread the word throughout Pennsylvania about the Inflation Reduction Act’s new benefits. 

I’ve spoken with many people in the region who didn’t know the Medicare program was prohibited from price negotiating directly with drug companies on behalf of enrollees. But the Biden-Harris Administration’s lower cost prescription drug law removed that barrier, paving the way for lower prices for beneficiaries and shoring up the promise of Medicare for our children and grandchildren. 

Last year, CMS announced the 10 drugs selected for the first cycle of negotiations, which included costly, life-saving medicines like Eliquis, a medicine used to prevent blood clots, and Januvia, a treatment for type 2 diabetes. Altogether, about nine million people with Medicare used one or more of the 10 selected drugs in 2023, costing taxpayers over $56 billion. Finally, we have the authority to bring those costs down.

On August 15, President Biden and Vice President Harris announced the new, lower prices agreed upon for these 10 drugs. These new, lower prices will go into effect on January 1, 2026 – ushering in a new era of savings for people with Medicare and the Medicare program. If these prices had been in effect in 2023, they would have saved Medicare an estimated $6 billion, or 22 percent of what Medicare spent on those drugs – that’s money saved for taxpayers and working families.

For example, the most common of these drugs is Eliquis, a blood thinner that nearly four million Medicare enrollees use. The current list price is $521. Under the new deal, the new price will be $231, a 56% decrease. This is just the beginning.

Under the President’s law, new drugs will be selected for negotiation each year, creating the potential to benefit even more seniors and people with disabilities with Medicare, and saving taxpayers more money. To read more about the drugs selected for negotiation and the new prices, go to LowerDrugCosts.gov or MedicamentosBajoPrecio.gov.

Access to life-saving prescription drugs should not force working families to make difficult and potentially harmful decisions, like forgoing needed medicines to provide food for their family or pay rent. This is what our work is all about – and now, we are proud to usher in a new era for Medicare marked by lower prices, hope, and peace of mind.