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Biden administration unveils first prescription drugs subject to price negotiations

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Article

CBO estimates program could save nearly $100 billion over 10 years

Capsules on $100 bills ©Oleg-stock.adobe.com

©Oleg-stock.adobe.com

The Biden administration has announced the first 10 prescription medications over whose prices it will negotiate for payment under Medicare Part D. The list includes several heavily advertised drugs for treating diabetes, heart failure and other chronic diseases.

Authority for the Centers for Medicare and Medicaid Services (CMS) to conduct the first-ever price negotiations directly with pharmaceutical companies was included under the Inflation Reduction Act of 2022. Until then CMS had been prohibited from doing so.

In a statement, CMS Administrator Chiquita Brooks-LaSure called the announcement “a significant and historic moment” for Medicare. “Our goal with these negotiations is to improve access to some of the costliest drugs for millions of people with Medicare while driving competitions and innovation,” LaSure said.

“Thanks to the landmark Inflation Reduction Act, we are closer to reaching President Biden’s goal of increasing availability and lowering prescription drug costs for all Americans,” said Xavier Becerra, secretary of the U.S. Department of Health and Human Services (HHS).

The drugs whose prices the government wants to negotiate and their uses include:

  • Eliquis (preventing and treating blood clots),
  • Jardiance (diabetes, heart failure),
  • Xarelto (preventing and treating blood clots, reducing risk for patients with coronary or peripheral artery disease),
  • Januvia (diabetes),
  • Farxiga (diabetes, heart failure, chronic kidney disease),
  • Entresto (heart failure),
  • Enbrel (rheumatoid arthritis, psoriasis, psoriatic arthritis),
  • Imbruvica (blood cancers), and
  • Stelara (psoriasis, psoriatic arthritis. Crohn’s disease, ulcerative colitis)

Also included in the list are several well-known insulin products, including Fiasp, Fiasp FlexTouch, Fiasp PenFrill, NovoLog,FlexPen., and NovoLog PenFill.

According to HHS, the drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs between June 1, 2022 and May 3, 2023, the time period used to determine which drugs were eligible for negotiation. Part D enrollees taking these drugs paid $3.4 billion in out-of-pocket expenses for them in 2022.

The Congressional Budget Office has estimated that negotiating prices for them will save Medicare close to $100 billion over a decade.

Pharmaceutical manufacturers with a drug included in the list have until October 1 to decide whether to participate in the negotiations. Those that don’t will either have to pay an excise tax or no longer have their products included in Medicare and Medicaid. Negotiations will continue until August 1, 2024, after which CMS will announce the “maximum fair price” agreed upon for each drug. The prices will take effect at the start of 2026.

Three organizations—the National Infusion Center Association, the Global Colon Cancer Association and Pharmaceutical Research and Manufacturers of America, have sued in federal court to try and stop the negotiations.

Physicians' organizations applauded the announcement. "Family physicians regularly see high prices result in access barriers for their patients," Tochi Iroku-Malize, MD, MPH, FAAFP, president of the American Academy of Family Physicians said in a statement. "Making these medications more affordable for patients will strengthen access to treatments, help patients better manage chronic diseases, and ultimately improve health outcomes while reducing costs."

In a statement on American College of Physician's website Darilyn V. Moyer, MD, MACP, executive vice president and CEO of the college said, "Prescription drug costs can be a significant barrier especially for our patients who suffer from multiple, complex chronic conditions. We call on pharmaceutical manufacturers to engage with Medicare in negotiating prices. Our nation’s older adults deserve to be able to access all of the health care services they need, including prescription medications."

If the negotiating program is allowed to continue, CMS will select 15 additional drugs covered under Medicare Part D for 2027, 15 covered under both Parts B and D for 2028, and 20 drugs for each year after that.

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