In a first-of-its-kind move for the federal government, on Tuesday the Biden administration announced a common drug to treat diabetes and the blood thinner Eliquis are among the first 10 drugs subject to Medicare price negotiations in a bid to bring down prescription drug costs for seniors.

"I promise you, I'm gonna have your back, and I'll never stop fighting for you on this issue — and nor will Kamala," President Joe Biden, also referring to Vice President Kamala Harris, said in remarks Tuesday in the East Room of the White House.

Biden has cast the effort — established in the sweeping Inflation Reduction Act he signed into law last year — as a key tenet of his economic vision as he asks voters to give him another four years in the White House. 

"We pay more for prescription drugs than any other major economy in the world. You can walk in a local drug store across the country, you're paying two to three times more for that exact same prescription manufactured by that exact same company than it would have cost you in Canada or France or anywhere else in the world," Biden said, arguing a special "carve out" prevented Medicare from negotiating its prices with pharmaceutical manufacturers. "For years, Big Pharma blocked this. They kept prescription drug prices high to increase their profits...but finally finally finally, we had enough votes — by a matter of one — to beat Big Pharma."

Along with Eliquis, the blood thinner Xarelto, diabetes medications Januvia and Jardiance, and insulin products Fiasp and NovoLog are also subject to negotiations. The remaining 10 drugs include Enbrel for rheumatoid arthritis, leukemia treatment Imbruvica, heart failure drug Entresto, Stelara for Crohn’s disease and Farxiga for diabetes, heart failure and chronic kidney disease. 

Medicare will be able to negotiate directly with the drugs’ manufacturers. The medications come from some of the most well known companies in the pharmaceutical industry such as Eli Lilly and Co., Johnson & Johnson and Amgen. 

“The Inflation Reduction Act created a system where [the Centers for Medicare and Medicaid Services, or CMS] would look at the highest spend drugs, the drugs that Medicare has to pay the most for, that affects as many seniors,” White House Domestic Policy Advisor Neera Tanden said in an interview with Spectrum News on Tuesday. “And so that's how the drugs were selected.”

When it comes to Eliquis, for instance, Medicare spent about $10 billion in 2020 on the drug, according to AARP research.

Tanden said CMS will start the year-long negotiation process for the drugs announced on Tuesday in the fall. Biden said the new prices for the drugs will be announced by Spet. 2024 and they will take effect in Jan. 2026. 

“We expect that drugs that affect a lot of seniors that weren't part of this first round will be part of future rounds,” Tanden added. 

More than 52 million people who either are 65 or older or have certain severe disabilities or illnesses get prescription drug coverage through Medicare's Part D program, according to the Centers for Medicare and Medicaid Services, or CMS.

About 9% of Medicare beneficiaries age 65 and older said in 2021 that they did not fill a prescription or skipped a drug dose due to cost, according to research by the Commonwealth Fund, which studies health care issues.

Companies that do not participate in negotiations with Medicare will face hefty tax penalties or they can choose to remove their drugs from Medicare or Medicaid coverage, which Tanden said would cut them off from a sizable share of the U.S. market. 

“Right now the [Department of Veterans Affairs] negotiates drug prices. They deliver 50% lower costs for veterans than seniors get in Medicare and we have no evidence of companies leaving the VA program,” Tanden said. “They just negotiate a price that is still effective for them.”

"When implemented, prices on negotiated drugs will decrease for up to 9 million seniors. These seniors currently pay up to $6,497 in out-of-pocket costs per year for these prescriptions," the president said in a statement. "In addition, the nonpartisan Congressional Budget Office reports that this will save taxpayers $160 billion by reducing how much Medicare pays for drugs through negotiation and inflation rebates."

CMS aims to negotiate the lowest maximum fair price for drugs on the list released Tuesday. That could help some patients who have coverage but still face big bills like high deductible payments when they get a prescription.

Currently, pharmacy benefit managers that run Medicare prescription plans negotiate rebates off a drug's price. Those rebates sometimes help reduce premiums customers pay for coverage. But they may not change what a patient spends at the pharmacy counter.

“This is a start of a real new deal for consumers, because for the first time Medicare will be negotiating drug prices in a way that lowers prices for consumers,” Tanden said. “We know one out of every four seniors experiences real struggles to pay for drugs.” 

The pharmaceutical industry has been gearing up for months to fight these rules. Already, the plan faces several lawsuits, including complaints filed by drugmakers Merck and Bristol-Myers Squibb and a key lobbying group, the Pharmaceutical Research and Manufacturers of America, or PhRMA.

Biden referenced the lawsuits in his statement Tuesday morning, pledging that he is "not backing down" despite those challenges.

"There is no reason why Americans should be forced to pay more than any developed nation for life-saving prescriptions just to pad Big Pharma’s pockets," the president said. "For many Americans, the cost of one drug is the difference between life and death, dignity and dependence, hope and fear. That is why we will continue the fight to lower healthcare costs – and we will not stop until we finish the job."

At the event Tuesday, Biden acknowledged that the White House sought to lower drug prices for all Americans, "but lost on getting everyone." 

Where he does see a potential benefit for all Americans, however, is the impact of the Inflation Reduction Act as a whole — he noted that inflation has fallen with wages growing.

"The Inflation Reduction Act gives you more breathing room, espeially when it comes to health care costs," Biden said. 

Asked how the administration seeks to make sure the price negotiations do not stifle innovation in the industry, Tanden said they “share the goal of innovation in our prescription drug system; We know that that is really important to effective results for people.”

“The Congressional Budget Office did a deep dive on this question when analyzing the Inflation Reduction Act and they found that the IRA would only have an impact on one drug over the next 10 years,” she added. “So we really don't see any impact on innovation.”

The Associated Press contributed to this report.