Round 1 Of US Drug Price Negotiations Suggests Medicare Can Beat Original Part D System

 
• By Sarah Karlin-Smith
  
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CBO estimated Medicare would get 50% net price reductions under the IRA, but CMS actually garnered 22%. The CBO analysis could not account for some of the particulars of the negotiations, but some health policy experts stressed any net gain over private Part D plan negotiation is a win.

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Medicare achieved a 22% net price reduction in aggerate through its first drug price negotiations. • Source: Shutterstock

About two years ago when the US Congressional Budget Office was told to estimate the impact of the Inflation Reduction Act’s Medicare drug price negotiation provisions, it projected the net prices of the drugs targeted for the program would decrease 50% on average as a result of negotiation.

Key Takeaways

  • Medicare achieved smaller net spending discounts on aggregate on the first 10 drugs subject to government negotiations than was predicted by CBO as the IRA was being finalized. The difference may be in part due to implementation decisions made by CMS.

The estimate was a bit higher than the 22% lower net spending in aggregate Medicare said would have been achieved...

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