Medicare Battles Prices
For the first time since its inception, Medicare, the U.S.’s national health insurance program, will be negotiating prices for some of the most expensive drugs on the market. Granted last year by the federal government, Medicare received negotiating power between their interactions with private pharmaceutical companies. Assuming the negotiations go smoothly, lower prices should take effect by 2026, with Medicare estimated to save $25 billion by 2031. A few of the drugs from a list of ten that will be targeted include treatments for diabetes, blood thinners, cardiovascular medicine, and more.
The move for Medicare to negotiate these medicinal prices was carried out by the Biden Administration, which will be a fundamental aspect of his 2024 presidential campaign. With rising costs through previous record-high inflation, Biden hopes to depict his progress towards lowering costs for the American populous. Aside from any political motivations, the drug price issue has been one of severe importance in the past decade. U.S. prescription drug prices are roughly 2.5 times higher than prices in nations of similar income levels. Furthermore, from July 2021 to July 2022, the average drug price increase was nearly 32%, far higher than that period’s inflation of 8.5%. Specifically, a few of these drugmakers whose prices are in question by the Biden Administration are AstraZeneca, Eli Lilly, Johnson and Johnson, and others. With medical spending accounting for over 18% of national gross domestic product, the topic is one of great magnitude for public health.
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