Medicare drug price negotiations what’s ahead in 2024

U.S. patients and drugmakers will get a first glimpse of how much Medicare can negotiate down drug prices in 2024, setting the precedent for a controversial process that may affect what seniors pay for dozens of medications by the end of the decade. 

It could also be a pivotal year for the lawsuits that drugmakers – including Merck, Johnson & Johnson and Bristol Myers Squibb – have filed against the price talks. Decisions could come down in some of the cases next year, which could eventually escalate the issue to the Supreme Court.

President Joe Biden’s Inflation Reduction Act, which passed in a party-line vote last year, gave Medicare the authority to directly hash out drug prices with manufacturers for the first time in the federal program’s nearly 60-year history. 

Medicare is negotiating prices for the first round of 10 prescription drugs in a bid to make those costly treatments more affordable for older Americans. By the fall, the federal government will publish the agreed-upon prices for those medications, which will go into effect in 2026. 

The outcomes of the talks will have huge stakes for the pharmaceutical industry, which views the process as a threat to its revenue growth, profits and drug innovation.

The final prices will determine how much revenue the companies that make the drugs can expect to lose in a few years. The figures will also give other drugmakers an idea of how much their sales could be affected if their medications are selected for future rounds of negotiations. 

But the final agreed-upon prices are also significant for patients, who will get a first look at how much money the talks will save them at a time when many older people increasingly struggle to afford medications. 

“We’re going to…