Out-of-pocket prescription costs for Minnesotans to decrease in next few years
The federal government is moving ahead with plans to give Medicare a seat at the bargaining table, when it comes to negotiating prices for prescription drugs.
On Tuesday, the Biden administration announced the first ten drugs up for price negotiation — including Jardiance for people with type 2 diabetes and Xarelto, a blood thinner. Those negotiations may take several years. This begins a historic precedent set by President Biden’s Inflation Reduction Act, as the government has not had the chance to mediate prices for prescription drugs.
University of Minnesota Professor of Pharmaceutical Economics and Management and director of the PRIME Institute Dr. Steve Schondelmeyer said that costs of these prescriptions can be as much as an elderly American’s median senior income.
“Fortunately, if they’re covered under Medicare, Medicare covers some of the costs, [but] even there the out of pocket costs for some of these drugs can be $6,000 a year.”
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The White House says the move will help elderly Americans save money. But many drugmakers say the decision was too rushed and is a brazen overstep in power by the federal government. Those refusing to negotiate may face increased taxes.
Minnesota has a rapidly aging demographic and negotiations are expected to take years, while prices will not be settled until 2026. Schondelmeyer says that due to provisions within the Inflation Reduction Act, Minnesotan’s should see prices continuously ease in the coming years.
“It does include other provisions like a a cap on the total out of pocket costs in a year; $2,000, beginning in 2025. It has a cap on the cost of insulin at $35 a month that I believe has already gone into effect.” He said, “So it has a number of provisions that will reduce the out of pocket costs to consumers in Minnesota and seniors in particular.”
MPR News host Cathy Wurzer spoke with Schondelmeyer to discuss this new precedent and what it means for Minnesotans in the full conversation found above.