CMS' drug negotiation program could save $26B over 3 years, study finds

CMS' Medicare Drug Price Negotiation Program will likely save the federal government billions of dollars, according to a study published Jan. 27 in JAMA Health Forum.

Four things to know:

1. By Sept. 1, 2023, the agency will post the first 10 Medicare Part D drugs selected for the program, which will allow Medicare to negotiate how much it pays for certain medications. CMS will select for negotiation 15 more Part D drugs for 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year after that.

2. In the study, researchers estimated how much money the Medicare Drug Price Negotiation Program would have saved the government if it was implemented from 2018 to 2020. They identified 40 top-selling drugs drugs that CMS would have picked for drug pricing negotiation under the Inflation Reduction Act, a $739 billion package that aims to lower drug costs.

3. The study simulated negotiated prices by using a "ceiling price," which is at least 25 percent off the average price drug manufacturers charge to nongovernment entities, like commercial payers. The Inflation Reduction Act, states that the maximum negotiated price must fall below this ceiling price.

4. Medicare is the largest buyer of prescription drugs in the U.S., and those drugs account for more than one in four healthcare dollars the agency spends. Researchers found that the drug negotiation program would have saved the government $26.5 billion, or 5% of estimated net Medicare drug spending, from 2018 to 2020. 

Click here for more information on the study.

Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars