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Balance innovation — Medicare laid out in the greatest detail yet how it will choose which drug prices it will negotiate in its brand-new program, and how it will figure out what the government’s opening offer will be. Adobe

WASHINGTON — Medicare laid out Wednesday in the greatest detail yet how it will choose which drug prices it will negotiate in its brand-new program, and how it will figure out what the government’s opening offer will be.

Democrats outlined some parts of the process in the Inflation Reduction Act that passed Congress last August, but the details of how drugs will be selected and what factors will be considered have been vague until now. Though the actual negotiated prices won’t take effect for years, Medicare officials must announce the first 10 drugs they’ll negotiate over by Sept. 1.

The guidance clarifies that the agency will choose the 50 pharmacy drugs that cost Medicare the most money, based on gross expenditures. If drugs have the same cost to the program, then the one that has been approved longer will be ranked higher.

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