Medicare Negotiated Drug Prices 4.7 Times Higher Than NHS Negotiated Prices

The Health and Human Services (HHS) Secretary, once forbidden by law to negotiate drug prices covered by Medicare, has just established the maximum fair price it will pay for ten drugs in 2026. According to the Inflation Reduction Act, selected drugs for negotiation had to fit a certain market profile. All ten are single-source products (brand name drugs without generic competition) that will have been on the market for 9 years (for small molecule products) or 13 years (for biologics) by January 2026. All ten are among the highest Medicare expenditure drugs in recent years. 

PharmacyChecker compared Medicare’s maximum fair prices for the ten selected drugs to estimates of prices negotiated on behalf of English residents by the National Health Service (NHS) England. PharmacyChecker found that Medicare negotiated prices were 471.74% higher, on average, than NHS negotiated prices. 

It’s true that the UK has had practice. Although a newfound tool by the U.S., the United Kingdom has utilized direct price negotiation with pharmaceutical companies for the drugs they provide since the first version of the Voluntary Price Regulation Scheme was introduced in 1957. However, both the Medicare population and that of the UK hover around 67 million people, meaning that the markets should wield comparable bargaining power. As Medicare's limited authority to negotiate broadens beyond just ten high-expenditure drugs, the HHS should demand prices closer to those that the NHS achieves.

Medicare needs to throw its weight around! However exciting it is that the U.S. is finally standing up for its collective healthcare, American patient advocates should not settle for bloated "fair" prices. Popular blood thinner, Eliquis, is set to cost Medicare $231 for a 30-day supply in 2026. NHS England has negotiated the price down to around $57, resulting in the Medicare negotiated price being 405.26% the NHS negotiated price. Eliquis is marketed globally by Bristol Myers Squibb and Pfizer, meaning NHS and HHS are negotiating with the same drug company to achieve their maximum fair price. Medicare will pay three times more than the NHS for Januvia, a type 2 diabetes drug marketed in both countries by Merck Sharp Dohme. 

Sources: Medicare Negotiated Price published by the Centers for Medicare & Medicaid Services. PharmacyChecker calculated the NHS England Negotiated Price using the Cost Per Quantity (GBP) in NHSBSA Prescription Cost Analysis – England – 2022-23. Please contact research@pharmacychecker.com for more detailed methodology.

How does this affect patients’ drug costs? 

None of the Medicare negotiated prices compared above speak to a patient’s out-of-pocket responsibility, which is what matters most to those subjected to high drug prices in the United States. Older patients will more immediately experience the effects of the Inflation Reduction Act's new caps on their insulin expenses and annual out-of-pocket maximum more so than the negotiated prices listed above. At the beginning of 2023, enrollees saw their insulin out-of-pocket costs decrease to a maximum of $35 per month. Starting in 2025, the annual out-of-pocket maximum for a Medicare recipient is $2000.  

By the time the price is lowered for this first batch of drugs in 2026, it might make little difference for some who will already be benefiting from the $2,000 limit on yearly costs. In most cases, these medications could be taken for a year or longer, depending on the condition and individual response to treatment. Some are chronic therapies, meaning they could be part of a lifelong treatment plan, while others might be adjusted or stopped based on effectiveness or health changes. For patients that are prescribed these medicines throughout 2026, negotiated prices of eight out of the ten selected medications exceed $2,000 per year. 

To continue our comparison to England: patients residing in the UK face an out-of-pocket maximum of £114.50 (~ $149.88 USD) per year. A 30-day supply of any of these medicines in the UK would cost a patient £9.90, or around $12.96 USD out-of-pocket. Insulin is free for residents over age 60, and anyone who fills out a medical exemption certificate (available to anyone who is treated with insulin). Some items are always free, including contraception and medication prescribed for hospital inpatients.

Eighty percent of Medicare enrollees have Medicare Part D (prescription drug) coverage. That’s 53.6 million Americans – most of them age 65 and over. According to government data, the population of England was around 57 million people in mid-2022.

*Beginning in 2025, people with Medicare Part D will have an annual limit, capping their out-of-pocket prescription drug costs at $2,000.

** Price based on the NHS's prescription prepayment certificate (PPC) program, which dictates that a 12-month PPC costs £114.50 and will save patients money if they need more than 11 prescribed items in a year. A PPC covers all of a patient’s NHS prescriptions, including NHS dental prescriptions, no matter how many prescription “items” are needed.

Maybe they won’t yield you, the patient, immediate savings, but negotiated prices that result in the overall Medicare program saving money matter in the long haul. As a result of the cap on out-of-pocket costs, your premiums are projected to increase (albeit with safeguards in place, per the Inflation Reduction Act). So it is only by lowering the price of medicine itself – not just your out-of-pocket spend – through mechanisms such as Medicare negotiations that overall spending will decline. 

Prescription Savings Today

At the time of this writing, it is August 2024. Out-of-pocket caps have yet to be implemented. Negotiated pricing has yet to go into effect. Although there are millions of Americans on Medicare, millions more remain uninsured or endure lackluster coverage from private or employer-sponsored insurance plans. To me, the “Coverage” column in the above chart is the most telling comparison of how the United States has failed to protect its public’s health: 

In the United States, Medicare is federal health insurance for anyone age 65 and older, and some people under 65 with certain disabilities or conditions.

In the UK, anyone legally residing in the United Kingdom is entitled to free NHS healthcare.

A dim view of the recent wins in Medicare is that drug companies can and will respond by hiking prices in the private sector: After all, there has been no sweeping reform to stop them. A sunnier prediction: Transparency is king. Having a fair maximum price now public means that pharmacy benefit managers that negotiate on behalf of private insurers will have precisely that: a fair price to point to in order to demand that same price from manufacturers. Time will tell. Until then, PharmacyChecker has compared the Medicare negotiated prices with those offered now at international online pharmacies and by discount coupon providers in the United States. Most international online pharmacies provide shipping to the United States. In the United States, technically, it is prohibited to import unapproved medication, whether through purchase over the Internet or while on a trip to a foreign country. However, it is important to know that people in the U.S. are not prosecuted for doing so, as long as the medication imported is for their own use and not for resale.

Related: Negotiated Medicare drug prices go into effect in 2026. What do patients do in the meantime? 

All international online pharmacy prices, Tier 1 and otherwise, are published by online pharmacies accredited by the PharmacyChecker (PC) International Pharmacy Verification Program (IPVP). Tier 1 means that an online pharmacy accredited by PharmacyChecker only fills prescription orders through their own pharmacy or dispensing pharmacy partners in Australia, Canada, Israel, New Zealand, the United Kingdom, or the U.S. Such countries are known to have equally advanced pharmaceutical and pharmacy regulatory systems. Please note that all PharmacyChecker-accredited online pharmacies (tier 1 and non-tier 1) meet the same high standards as identified in the PharmacyChecker IPVP. Prices in bold in the chart below are a patient’s best out-of-pocket savings option based on a PharmacyChecker price analysis. This analysis does not take into account eligibility for patient assistance programs and does not include generic alternatives’ pricing. If the “Active Ingredient” for your drug is hyperlinked below, click to compare generic pricing. If you are having trouble affording your prescribed drug therapy or have any questions regarding international mail order or online pharmacy safety, we encourage you to Ask PharmacyChecker about your options. PharmacyChecker publishes a sample list of accredited online pharmacies, along with their safety profile information, on our website. 

PharmacyChecker drug price comparisons 2024. Medicare Negotiated Price published by the Centers for Medicare & Medicaid Services.