An estimated 25,000 Montana seniors will benefit from a pricing deal struck last week between the federal government and pharmaceutical companies. For the first time, the two parties negotiated directly to reduce maximum prices for 10 of the costliest and commonly used prescription drugs covered by Medicare.

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Nationwide, the cost-savings agreement will slash list prices by 38 to 79%, according to the Centers for Medicare and Medicaid Services, which oversees the federal administration of the two health insurance programs. If these prices had been in effect last year, it said in a statement, Medicare would have saved an estimated $6 billion, or approximately 22%, on the drugs included in the deal.

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These negotiations were required under the Inflation Reduction Act, a $500 billion legislative package signed by President Joe Biden in 2022 to invest in clean energy, reduce health care costs and increase tax revenues.

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The bill passed the Senate on party lines with Vice President Kamala Harris casting the tie-break vote. Montana’s Republican members of the congressional federal delegation — Sen. Steve Daines and Rep. Matt Rosendale — voted against the legislation. Democrat Jon Tester voted for it.

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“Montanans shouldn’t have to struggle to fill their lifesaving prescription medications because big pharma is jacking up prices,” Tester said in a press release last week.

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Medicare negotiated prices on 10 drugs to go into effect in 2026. All are eligible under the insurance’s Part D program, which helps cover the cost of prescription drugs for enrollees. Then, from a pool of about 50 selected drugs that cleared a slew of technical benchmarks, Medicare moved forward with negotiations on those that accounted for the highest expenditures in a 12-month period.

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Drugs that help treat a range of conditions including rheumatoid arthritis, diabetes, heart failure and leukemia will be hundreds, or even thousands, of dollars cheaper for 30-day supplies. Two blood thinners also made the list.

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A list price is the price that a manufacturer sets for a drug. They do not include any discounts or rebates that might be offered, nor do they capture the variety of insurance plans that also impact the price a person pays for any given drug.

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Therefore, the precise savings to everyday people isn’t known. But CMS estimates the total savings to people with Medicare prescription drug coverage would total in 2026. Taxpayers spend more than $50 billion a year on these 10 drugs.

How will these deals impact Montana seniors?

Over 192,000 Montanans are enrolled in Medicare, about 17% of the state’s total population, according to KFF data. Of those, an overwhelming majority also participate in the plan’s prescription drug coverage.

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Margie MacDonald, the executive director of Big Sky 55+, an organization that advocates for Montana seniors, said she hears regularly from people in dire medical situations who are unable to afford their prescription drug costs even when covered by the federal program.

Over 10,200 Medicare enrollees in Montana take Eliquis, one of the drugs on the list of 10 that prevents blood clots and prevents stroke. Its current list price for a 30-day supply is $521. Under the new agreements, that will drop down to $231 in 2026.

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Second to that is Xarelto. Nearly 4,500 Montanans on Medicare use the drug to treat blood clots and lower the risk for stroke, pulmonary embolisms or deep-vein thrombosis. Its 30-day price will change from $517 to $197.

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Nearly 20% of Montana’s population was over 65 years old, according to 2020 data, and that number is growing. High costs of prescription drugs for Medicare enrollees will not only create hardship for seniors, it will also continue to burden the health care system as a whole, according to the Big Sky 55+ director, who applauded the legislation.

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“It significantly bends the curve of controlling health care costs,” MacDonald said.

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Tester attended multiple roundtables with the organization, according to MacDonald, who is also a former state legislator. She said she had asked his team to hear them out on how the cost of prescription drugs were impacting everyday Montanans.

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“It’s something that he and his staff have always been attentive to,” she said. “We were happy and grateful when he was, in effect, the deciding vote to get this across the finish line.”

The politics of it all

The one-two punch of health care and rising costs continue to be a focal point in this year’s Senate race in Montana between Tester and Republican challenger Tim Sheehy.

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Tester articulates a platform of apolitical, common-sense governance. Sheehy brandishes his background as an entrepreneur and business executive as proof he’s the most fit for the job on these issues.

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Both agree drug prices are too high.

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“We absolutely need to do more to lower prescription drug prices for all Montanans, including our seniors,” a spokesperson for the Sheehy campaign said in an email. “It’s despicable watching these pharmacy middlemen drive up prices to line their pockets at the expense of lowering drug costs. The problem is the corrupt system is hurting Montanans and there needs to be accountability here.”

They differ in how they plan to address it.

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Tester ultimately supported the Inflation Reduction Act, which spanned beyond just giving the federal government the power to negotiate directly with drug companies.

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It capped out-of-pocket prescription drug costs for Medicare patients and limited the cost of insulin at $35 a month for Medicare patients. Additionally, the legislation also made hundreds of millions of dollars available for clean energy projects and rolled out tax incentives for people and corporations taking steps to lower emissions. It also injected funding into the Internal Revenue Service to ensure people pay taxes they owe.

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Lower drug costs leave insurance companies responsible for closing the gap between what patients used to pay for a drug and the new lower price tag.

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According to Politico, private insurance companies are poised to increase drug plan premiums significantly in the coming weeks in order to do just that. The Biden Administration announced it would give money to insurers to offset the cost.

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Sheehy blames heavy-handed government action in the form of the Inflation Reduction Act or Obamacare (another name for the Affordable Care Act) for higher premiums. His campaign website says increased government influence in the health care system has made things worse.

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“Montana seniors need relief yesterday, as they are being crushed by inflation from this disastrous Biden-Harris-Tester economy,” a Sheehy spokesperson said. “That is why Tim is fighting to make Montana affordable again by defeating inflation, increasing access to affordable generic drugs, and supporting common sense solutions like greater price transparency, competition, and shopping for services in our health care system."

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Previous reporting from Semafor unearthed remarks from Sheehy at a Glasgow meet-and-greet last year in support of “pure privatization” of the health care system, though he did not elaborate on details at the time. A Sheehy campaign spokesperson told Semafor, and later echoed to the Montana State News Bureau, that the candidate supports protecting Medicare benefits and keeping the promise of high quality care to seniors.

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Looking ahead, Medicare will negotiate for lower prices on more drugs in the years following 2026.

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A slew of drug makers and industry lobbyists filed multiple lawsuits against the government for the drug negotiation program. To date, the federal government has defeated all the legal challenges.

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This story has been corrected to reflect that U.S. Rep. Ryan Zinke did not cast a vote for the Inflation Reduction Act in 2022. Zinke was not yet a member of Congress, and therefore did not vote on the legislation.