Medicare negotiated prices higher elsewhere

Health Care

The Big Story

Medicare negotiated prices lower, still high by global standards

A new analysis from KFF found that while the Medicare drug price negotiation program set up by the Inflation Reduction Act achieved significant savings, the prices for the drugs still end up higher than what peer nations pay for the same products.

Remember: The savings achieved for the first 10 drugs chosen for Medicare negotiation were released in August, unveiling discounts of 38 percent to 79 percent on the list prices. Since Medicare often pays less for the list price and doesn’t disclose what it actually pays, however, the true savings are unclear.

The negotiated prices will go into effect beginning in 2026.

KFF found that the negotiation process resulted in Medicare paying lower prices than what the Veterans Affairs Department (VA) pays through its own negotiations.

“Big Four drug prices were higher than the new Medicare negotiated prices for all 10 drugs, which represents a change from a prior Congressional Budget Office analysis that showed that Big Four prices for top-selling brand-name drugs were 20% lower on average than net prices paid by Medicare Part D in 2017,” the analysis found, referring to the “Big Four” agencies — the VA, Department of Defense, Public Health Service and Coast Guard — whose drug prices are negotiated for by the VA.

But when compared to 11 other countries that are members of the Organisation for Economic Co-operation and Development, U.S. Medicare still paid significantly more than the average cost in the included peer nations.

The other countries were Switzerland, Germany, Belgium, Austria, Japan, Netherlands, the United Kingdom, Canada, France, Sweden and Australia.

“In all but one instance (the price of Stelara in Germany), every country in this comparison has lower prices than the Medicare negotiated prices for all 10 drugs. In nearly half of cases, Medicare’s negotiated prices are over three times the prices in comparably large and wealthy nations,” KFF noted.

Welcome to The Hill’s Health Care newsletter, we’re Nathaniel Weixel, Joseph Choi and Alejandra O'Connell-Domenech — every week we follow the latest moves on how Washington impacts your health.

Did someone forward you this newsletter? Subscribe here.

Essential Reads

How policy will be impacting the health care sector this week and beyond:

US life expectancy rose last year to highest levels since pandemic

U.S. life expectancy rose last year to its highest level since the COVID-19 pandemic, while death rates fell for almost all the top causes, according to Centers for Disease Control and Prevention (CDC) data. Life expectancy at birth was 78.4 years for the total U.S. population in 2023, according to the report released Thursday, an increase of nearly a full year from 77.5 years in 2022. The report showed women continue …

Full Story

What to know about California’s bird flu emergency

California declared a state of emergency this week over the spread of bird flu in the state as the virus continues to be detected among the state’s cattle herds. California Gov. Gavin Newsom (D) said in a statement Wednesday that the declaration of an emergency is meant to “ensure government agencies have the resources and flexibility they need to respond quickly to this outbreak.” This action marks one of …

Full Story

FDA keeps Mounjaro off shortage list after reevaluation

The Food and Drug Administration (FDA) has reaffirmed that Mounjaro and Zepbound are no longer in shortage following a reevaluation of its decision to remove it from the federal drug shortage list amid intense pushback from compounded drug manufacturers. The FDA determined in October that the active ingredient in Mounjaro and Zepbound — tirzepatide — was no longer in shortage after nearly two years. With the drug from Eli Lilly …

Full Story

In Other News

Branch out with a different read from The Hill:

Federal prosecutors bring 4 charges against Luigi Mangione

Luigi Mangione, the suspect accused of killing UnitedHealthcare CEO Brian Thompson, faces four new federal charges, newly unsealed court documents show.

Full Story

Around the Nation

Local and state headlines on health care:

Flu is prevalent across New York, state Health Department declares (Spectrum News)
With RFK nomination, Washington state health leaders brace for local impacts (KUOW)
This North Texas health provider can now serve patients on a sliding scale. Here's why (KERA)

What We're Reading

Health news we've flagged from other outlets:

The contortions GOP senators are making for RFK Jr. (Politico)
Merck's HIV treatment meets main goal in two late-stage studies (Reuters)
‘I was almost forced to do it’: One sickle cell patient’s story of sterilization, pressure, and regret (Stat)

What Others are Reading

Most read stories on The Hill right now:

Republicans announce funding agreement, Thursday vote as shutdown looms

House Republicans have reached an agreement on a plan B to avert a government shutdown ahead of Friday’s deadline and plan to vote on Thursday, lawmakers … Read more

Live updates: Dems slam Trump-backed spending bill before House vote

House Republicans say they have a deal for a new spending plan after the first one, a bipartisan effort, went down in flames when it was rejected by … Read more

What People Think

Opinions related to health submitted to The Hill:

Topics

Micron’s stock skids as AI momentum doesn’t make up for pressures elsewhere

The memory-chip company cited weakness in consumer-facing markets but momentum in higher-margin areas and those levered to AI.
MarketWatch - 1d
Oil prices settle higher with U.S. crude supplies down a 4th straight week

Oil futures on Wednesday posted their first gain in three sessions, with prices getting a lift from official U.S. data showing a fourth consecutive weekly decline in domestic crude inventories.
MarketWatch - 2d
We're using the dip in a consistent winner to buy back shares sold at higher prices

For the second straight day, we're putting cash to work Wednesday in an oversold market.
CNBC - 2d
Democrats demand answers from Trump pick Mehmet Oz on 'Medicare privatization'

Democratic senators pressed Dr. Mehmet Oz on his past "advocacy for Medicare privatization" after Donald Trump picked him to run the Centers for Medicare and Medicaid Services.
NBC News - Dec. 10
Oil prices end higher, lifted by fall of Syria’s Assad and China’s stimulus plans

Oil futures finished higher on Monday after China eased its overall monetary-policy stance for the first time in 14 years, as the nation’s Politburo vowed more forceful measures to boost the ...
MarketWatch - Dec. 9
House Republican eyes Medicare, Social Security for DOGE cuts

Rep. Mark Alford (R-Mo.) is floating Medicare and Social Security as potential areas of focus for President-elect Trump’s new Department of Government Efficiency (DOGE). Alford was pressed about ...
The Hill - Dec. 9
UK businesses expect lower margins and higher prices after Budget

Survey finds 54% of companies plan to raise prices in 2025 after national insurance increase
Financial Times - Dec. 5
House Republican: 'Hard decisions' needed on Social Security, Medicaid, Medicare

Rep. Rich McCormick (R-Ga.) said Tuesday that lawmakers will ultimately face tough choices on spending in next year's unified GOP government, suggesting cuts may be coming to social welfare ...
The Hill - Dec. 3
Zelensky Signals He's Open to Negotiating a Peace Deal

In a shift, the Ukrainian president indicates he would accept a cease-fire with Russia if his country obtains NATO membership.
The Wall Street Journal - Dec. 3