The US government has struck a deal with drug firms to significantly cut the cost of 10 prescription drugs used by over-65s for conditions including diabetes and arthritis.
The price cuts of between 38% to 79% will come into effect in 2026, the Centers for Medicare & Medicaid (CMS) said.
They will apply to people enrolled in the Medicare programme, which provides health coverage for Americans aged 65 and over.
The new policy is expected to cover about nine million people who use at least one of the drugs, the Department of Health said.
President Joe Biden said on Thursday that the deal was a “relief for the millions of seniors that take these drugs to treat everything from heart failure, blood clots, diabetes, arthritis, Crohn’s disease, and more”.
He said that the changes were part of the Inflation Reduction Act, passed by Democrats in 2022 thanks to a tie-breaker vote by Vice-President Kamala Harris, which allows Medicare to negotiate drug prices directly with manufacturers.
The US Department of Health estimated that the policy would save Medicare around $6bn (£4.7bn) if it was enacted today, based on last year’s drug prices.
In a hypothetical example provided by the department, a person using the Crohn’s disease treatment drug Stelara, part of the 10 negotiated prescription drugs, would see their bill reduced from $3,400 to $1,100 for a 30-day supply.
Xavier Becerra, the secretary of the US Department of Health, said that the deal represented the first direct negotiation between Medicare and drug companies.
“The American people are better off for it,” Mr Becerra said
A study released February by the RAND Corporation, a California think tank, found that drug prices in the US are on average three to four times higher than in 33 other countries, including the UK and neighbouring Canada.
Read More: US strikes deal to cut cost of 10 drugs for Medicare users
