In August, 2024 Centers for Medicare and Medicaid finalized negotiations to reduce the prices paid for 10 pharmaceuticals.
Price negotiations with pharmaceutical companies focused on 10 of Medicare’s costliest drugs. Medicare provides health insurance coverage for persons 65 and older, and is largely funded through payroll taxes, paid into the Medicare trust funds, administered by the Department of the Treasury. The Inflation Reduction Act (signed in August 2022) allows Medicare to directly negotiate prices under certain conditions. This price deal from the first round of negotiations will come into effect on January 1, 2026.
Drug costs are a significant driver of overall health costs worldwide, and Out of Pocket expenditure in general. This is particularly true in USA. Furthermore, US health spending is one of the highest in the world (and although the country excels in leading edge treatments), however some health indicators lag. The efforts to decrease costs to Medicare are expected to make the program more efficient.
