DRUG NEGOTIATION SUCCESSES — The Biden administration today is celebrating the results of the first Medicare drug price negotiations with drugmakers, an effort it claims will save the program $6 billion in 2026 when the new prices take effect, David, Lauren, Robert and Chelsea report. Older Americans will save approximately $1.5 billion in out-of-pocket costs on the 10 drugs selected for negotiation, according to the White House. The 10 prescription drugs — which treat a variety of ailments, including blood cancers and clots — accounted for $50.5 billion in total Part D spending from June 1, 2022, through May 31, 2023, according to data shared by HHS when the medicines were first selected for negotiations. The Biden administration didn’t immediately explain how it arrived at the figures though more information is expected to become available later this morning. “We are not stopping here,” Vice President Kamala Harris said in a statement. “Additional prescription drugs will be selected each year as part of our Medicare drug price negotiation program.” How we got here: The Inflation Reduction Act gave federal officials the ability to negotiate with drugmakers over the price of certain drugs. Federal officials and drugmakers began private discussions on the 10 selected drugs in October. Who might negotiations impact? HHS said 7.7 million Medicare beneficiaries enrolled in Part D filled a prescription for at least one of the selected drugs in 2022. However, making a case for patient impact might be difficult, Manatt Health consultants wrote in a recent post, “as most of the savings … will only indirectly benefit beneficiaries, whose costs are determined by the cost sharing design of their Part D plans.” What to watch for: The policy’s future is uncertain because most of the drug companies subject to the inaugural price negotiations have sued the administration over the program in multiple federal courts in a strategy legal experts say could lead to a circuit split that boosts the chances of the conservative-leaning Supreme Court taking a case. The administration has won at the district court level so far. But drugmakers and industry allies hope they can get appellate courts — and perhaps even the Supreme Court — to consider their challenges to the program before the prices kick in in 2026. A challenge from PhRMA, the brand-name drug lobby, is the furthest along at the 5th Circuit — widely known for its conservative tilt — though the legal issue in play there relates to whether its case can be heard in Texas. What does this mean for Vice President Kamala Harris’ presidential campaign? Harris will undoubtedly tout the price talks as the culmination of a yearslong effort by Democrats to tackle prescription drug costs. The Congressional Budget Office estimated that, by 2031, the negotiations will save the government $98.5 billion — a figure that Harris can point to despite that the prices for the first 10 drugs won’t kick in until 2026. What’s next? The administration has until March 1 to explain how it arrived at the prices. WELCOME TO THURSDAY PULSE. Our afternoon newsletter spearheaded by our colleague Sophie Gardner will have more on the drug pricing announcement later today. Send your tips, scoops and feedback to ccirruzzo@politico.com and bleonard@politico.com and follow along @ChelseaCirruzzo and @_BenLeonard_.
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