EXPLAINER: Lower prescription prices to take time in new law

WASHINGTON (AP) — After decades of failed attempts, Democrats passed legislation that aims to rein in the soaring costs of drugs for some in the United States.

It will take years for people to realize some of the most significant savings promised in the climate and health care bill that President Joe Biden signed this month.

The bill mostly helps the roughly 49 million people who sign up for Medicare's drug coverage. But many will be left out from direct savings after lawmakers stripped cost-savings measures for a majority of those covered by private health insurance.

A look at how some might benefit from the drug savings provisions in the “Inflation Reduction Act” and how drugmakers might push back on those efforts.

DRUG NEGOTIATIONS

For the first time, Medicare can negotiate the price of its costliest drugs.

In the U.S., “we’ve never had any entity that was negotiating on behalf of such a large group of people before,” said Leigh Purvis, the director of AARP's health care costs and access.

That new bargaining power won’t kick in until 2025, when Medicare is able to haggle over the price of 10 drugs covered by its prescription plan. By 2029, Medicare will be able to negotiate the cost of as many as 60 drugs.

It will take some time because the Health and Human Services Department will need to develop a plan for selecting which drugs will be negotiated. The complicated rule-making process will take years to devise and face intense lobbying and scrutiny from the pharmaceutical industry, which is eager to carve out loopholes in the new rules.

“The biggest lift is definitely going to be negotiations because the secretary is establishing a whole new program, and they’re going to do a lot of hiring,” Purvis added.

The savings are expected to be huge. The nonpartisan...