OUR VOICES: U.S. Department of Health and Human Services Saves Billions by Negotiating for Lower Drug Prices

By Julia Lothrop

The ability to afford needed medicines is about dignity, hope, and fairness. Those words have been at the center of our work at the U.S. Department of Health and Human Services (HHS) to implement, the Inflation Reduction Act, also known as the lower cost prescription drug law. This week marks a historic mile-stone, as HHS announced new, lower prices for 10 drugs selected for the first cycle of Medicare drug price negotiations.

As Acting Regional Director at HHS, part of my job is to spread the word across the south central states, including Texas, about the Inflation Reduction Act’s new benefits. As I’ve traveled around New Mexico, I’ve spoken with countless folks who are shocked to learn that – until now – the Medicare program was prohibited from negotiating directly with drug companies on behalf of enrollees. But the lower cost prescription drug law lifted that prohibition, paving the way for lower prices for enrollees and shoring up the promise of Medicare for our children and grandchildren.

Last year, we announced the 10 drugs selected for the first cycle of negotiations, which included costly, life-saving medicines like Eliquis, a medicine used to prevent blood clots, and Januvia, a treatment for type 2 diabetes. Altogether, about nine million people with Medicare used one or more of the 10 selected drugs in 2023, costing taxpayers over $56 billion. In Texas, more than 623,000 Medicare enrollees take the 10 drugs selected. Finally, we’re moving the needle to bring those costs down.

On August 15th, the administration announced the new, lower prices agreed upon between HHS and the participating drug companies. These new, lower prices will go into effect on January 1, 2026 – ushering in a new era of savings for people with Medicare and the Medicare program. If these prices had been in effect in 2023, they would have saved Medicare an estimated $6 billion, or 22 percent of what Medicare spent on those drugs – that’s money saved for taxpayers and working families.

This is just the beginning. Under the law, additional drugs will be selected for negotiation each year, creating the potential to benefit even more seniors and people with disabilities with Medicare, and saving tax- payers more money. To read more about the drugs selected for negotiation and the new prices, go to LowerDrugCosts. gov or MedicamentosBajoPrecio.gov.

Access to life-saving prescription drugs should not force working families to make gut-wrenching decisions, like forgoing needed medicines in order to keep food on the table or pay rent. This is what our work to implement the law is all about – and this week, we are proud to usher in a new era for Medicare marked by better prices, hope, and peace of mind.

Julia Lothrop is the U.S. Department of Health and Human Services Acting Regional Director for Arkansas, Louisiana, New Mexico, Oklahoma, Texas, and 68 Federally Qualified Tribes. She has worked with the regional office for over 20 years.