HomeFinance NewsUS judge allows Medicare to negotiate drug prices, rejecting block attempt

US judge allows Medicare to negotiate drug prices, rejecting block attempt

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The U.S. government’s Medicare health insurance program will be able to negotiate prices for some prescription drugs starting this fall, according to a federal judge’s ruling. The decision by U.S. District Judge Michael Newman in Dayton, Ohio, came in response to a lawsuit filed by the U.S. Chamber of Commerce, the nation’s largest business lobbying group. The Chamber of Commerce argued that the program violates the U.S. Constitution by forcing drugmakers to accept low prices, but the judge rejected this argument, stating that participation in Medicare is voluntary. The ruling allows the price negotiation program to begin on Oct. 1, but the lawsuit will continue.

Under the new program, Medicare, which primarily serves Americans aged 65 and older, will require drugmakers to negotiate prices for selected expensive drugs with the U.S. Centers for Medicare and Medicaid Service (CMS). This initiative aims to save $25 billion annually by 2031 and reduce prescription drug costs for Americans. Drugmakers whose medicines were selected for the first round of negotiations must agree to start talks on Oct. 1, or face steep penalties or exclusion from government healthcare programs. The negotiated prices, which will take effect in 2026, will include a minimum discount of 25% from the list price.

The ruling by Judge Newman is a victory for President Joe Biden’s healthcare agenda, as it upholds one of his key initiatives. The Biden administration has emphasized the need to lower healthcare costs for American families, despite facing opposition from Republicans and the pharmaceutical industry. The decision sets a precedent for other lawsuits challenging the program, which have been filed by individual drugmakers and industry groups. While the Chamber of Commerce’s lawsuit will proceed, other similar cases are progressing more slowly, with potential rulings expected next year. It is worth noting that the Biden administration asserts that drug price negotiations are constitutional and common practice in many other countries.

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