Hailie Jadoo, PharmD, MPH, Park Nicollet
Link to Article: https://www.cnbc.com/2023/08/29/10-drugs-to-face-medicare-price-negotiations-see-the-list.html
The Biden administration has taken the next step towards reducing costs for older Americans by revealing the first 10 prescription drugs that will undergo price negotiations between manufacturers and Medicare. The Inflation Reduction Act, passed in 2022, grants Medicare the authority to directly negotiate drug prices for the first time in its 60-year history. The negotiated prices for the following medications are expected to take effect in 2026: Eliquis®, Jardiance®, Xarelto®, Januvia®, Farxiga®, Entresto®, Enbrel®, Imbruvica®, Stelara®, Fiasp®, and NovoLog®. About 20% of total Medicare Part D prescription drug costs, totaling $50.5 billion, went towards the cost of these 10 drugs from June 1, 2022 to May 31, 2023. In 2022 alone, 9 million seniors spent $3.4 billion out-of-pocket on these medications.
These drugs lack generic competition and have been on the market for many years. The focus on Medicare negotiations is a key strategy to address escalating cost of medications in the United States (US). Advocates see it as a necessary change to make healthcare more accessible, particularly for seniors facing financial challenges. President Biden emphasized the need for healthcare to be a right, not a privilege. However, this is a threat to the revenue, profits, and innovation of the pharmaceutical industry. Drugmakers and industry groups are suing to stop the negotiations. The lawsuits are scattered across federal courts and claim that negotiations infringe on their constitutional rights. The Biden administration vows to resist, viewing the legal challenges as evidence of progress in their efforts to reduce drug prices.
Drug manufacturers needed to commit to negotiations by October 1, 2023 and the Centers for Medicare & Medicaid Service (CMS) will present an initial price offer to manufacturers in February 2024. Negotiations conclude in August 2024, and agreed-upon prices will be published in September 2024, taking effect in January 2026. If a manufacturer refuses to negotiate, they will face an excise tax of up to 95% of their medications’ US sales or must withdraw products from Medicare and Medicaid markets. CMS plans negotiations for an additional 15 drugs in 2027 and another 15 in 2028, for a total of 40 drugs by the end of 2028. Starting in 2029, the number increases to an additional 20 negotiated medications per year. CMS plans on expanding to include Medicare Part B drugs in 2028. Projections suggest negotiations could save Medicare $98.5 billion over a decade and provide a benefit to Medicare enrollees, particularly those who take four to five prescription drugs monthly.
References:
1. Constantino AK. Biden Administration Unveils First 10 Drugs Subject to Medicare Price Negotiations. CNBC. Updated August 29, 2023. Accessed December 15, 2023. https://www.cnbc.com/2023/08/29/10-drugs-to-face-medicare-price-negotiations-see-the-list.html.
2. Cubanski J, Damico A, Neuman T. How Medicare’s New Drug Price Negotiation Program could expand access to selected drugs. KFF. Published September 26, 2023. Accessed December 15, 2023. https://www.kff.org/medicare/issue-brief/how-medicares-new-drug-price-negotiation-program-could-expand-access-to-selected-drugs/#:~:text=The%2010%20drugs%20selected%20for,(Enbrel)%2C%20Crohn’s%20disease%20.