Give something, get something from prescription drug prices

A new KFF issue brief explains how, in addition to lowering prescription drug prices, the Medicare drug price negotiation program improves coverage of the drugs selected for negotiation for Medicare beneficiaries. 

The Inflation Reduction Act, which requires the federal government to negotiate the price of some drugs that generate high spending by Medicare, also requires all Medicare Part D plans to cover each of the drugs that are selected for price negotiation, including all dosages and forms, when negotiated prices take effect. That can significantly expand beneficiaries’ access to such drugs. 

In one noteworthy example, less than 1% of Part D enrollees in 2026 are in a drug plan that covers the GLP-1 drug Wegovy, which Medicare currently covers as a treatment for cardiovascular disease. (Medicare is prohibited by law from covering drugs for weight loss, although next year the Trump administration is planning to launch a temporary, voluntary model to expand Medicare coverage of GLP-1s to treat obesity.) But because Wegovy is one of 15 drugs selected for price negotiation in 2022, all Part D plans will have to cover the drug when Medicare’s negotiated price takes effect in 2027. 

Don’t get me wrong , expanded coverage is a good thing for patients. On the other hand expanding coverage even at “negotiated” prices means more spending that didn’t previously exist and hence higher premiums down the road.

Despite what Mr Trump believes, negotiations require some benefit for both parties and that appears to be the case here.