What’s a fair price for a prescription drug? Medicare’s about to weigh in

By Leslie Walker, Dan Gorenstein

Drugmakers around the globe are bracing for a major shakeup in how one of their largest customers does business. On Sept. 1, Medicare will target its first 10 drugs for historic price negotiations. The medications are sure to be among the country’s costliest and will likely include common treatments for cancer and diabetes.

The negotiations could save the federal government nearly $100 billion by 2031 and slash some prices Medicare pays by half. They are also the subject of multiple lawsuits by major drugmakers including Merck and Johnson & Johnson.

The power to negotiate prices directly with drug companies is one …

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