- The Biden administration has announced the first 10 prescription drugs that will be subject to price negotiations between manufacturers and Medicare.
- The announcement marks the beginning of a controversial process under the Control Inflation Act aimed at making expensive medicines more affordable for older Americans.
- The list includes Bristol-Myers Squibb’s blood thinner Eliquis, Johnson & Johnson’s blood thinner, Novo Nordisk’s insulin products and Merck’s diabetes drug Januvia.
The Biden administration on Tuesday announced the first 10 prescription drugs subject to price negotiations between manufacturers and Medicare, aimed at making expensive drugs more affordable for older Americans. Started a controversial process.
President Joe Biden’s Inflation Control Act, passed by a partisan vote last year, gave Medicare the power to directly offset drug prices with manufacturers for the first time in the federal program’s nearly 60-year history. The agreed prices for the first drug are as follows: It is scheduled It is expected to enter into force in 2026.
Click here for the 10 drugs subject to the initial consultation this year:
- Manufactured by Bristol-Myers Squibb, Eliquis is used to prevent blood clots and reduce the risk of stroke.
- Jardiance, manufactured by Boehringer Ingelheim, is used to lower blood sugar levels in people with type 2 diabetes.
- Xarelto, manufactured by Johnson & Johnson, is used to prevent blood clots and reduce the risk of stroke.
- Merck’s Januvia is used to lower blood sugar levels in people with type 2 diabetes.
- Faxiga, made by AstraZeneca, is used to treat type 2 diabetes.
- Manufactured by Novartis, Entresto is used to treat certain types of heart failure.
- Enbrel, manufactured by Amgen, is used to treat rheumatoid arthritis.
- Imbruvica, made by AbbVie, is used to treat many types of blood cancer.
- Manufactured by Janssen, Stelara is used to treat Crohn’s disease.
- Fiasp and NovoLog, insulins manufactured by Novo Nordisk.
The Medicare negotiations are the centerpiece of the Biden administration’s efforts to curb rising drug prices in the United States. Some Democrats in Congress and consumer advocacy groups have been pushing for change for years, as many seniors across the country struggle to pay for health care.
But the pharmaceutical industry sees the process as a threat to revenue growth, profits and drug innovation. Pharmaceutical companies such as Merck and Johnson & Johnson and their supporters have sought to derail negotiations, filing at least eight lawsuits in recent months seeking to declare their policies unconstitutional.
The medicines listed Tuesday are among the 50 highest spent in Medicare Part D, which covers prescription drugs dispensed by seniors at retail pharmacies.
Ten drugs accounted for $50.5 billion, about 20% of total Part D prescription drug costs. June 1, 2022 through May 31, 2023, according to the Centers for Medicare and Medicaid Services (CMS).
These drugs have been on the market without generic competitors for at least 7 years, or 11 years in the case of biological products such as vaccines.
A senior Biden administration official told reporters in a call Tuesday that nine million seniors spent $3.4 billion out of pocket on 10 medications in 2022 alone.
Medicare covers approximately 66 million people in the United States, 50.5 million The patient is now enrolled in the Part D plan, according to the health policy research institute KFF.
Pharmaceutical companies have until October 1 to sign contracts to participate in the negotiations. CMS will then make an initial price offer to manufacturers in February 2024, and manufacturers have one month to accept or counteroffer.
Negotiations will conclude in August 2024 and the agreed price will be announced on September 1, 2024. The reduced price will not take effect until January 2026.
If drug companies do not negotiate, they will have to pay excise taxes on up to 95% of their drug sales in the United States or withdraw all products from the Medicare and Medicaid markets.
The pharmaceutical industry claims the penalties are: as high as 1,900% Revenue per day for pharmaceuticals.
After the initial negotiations, CMS will be able to negotiate prices for 15 more items in 2027 and 15 more items in 2028. After 2029, that number will increase to 20 bargaining drugs per year.
“I think it’s very important to keep in mind that the negotiation process is cumulative,” said Lee Purvis, director of prescription drug policy at the AARP Institute for Public Policy. “Up to 60 drugs could be negotiated by 2029.”
CMS selects only Medicare Part D drugs for the first two years of negotiation. In 2028, the company plans to add more specialty medicines covered by Medicare Part B, usually administered by a doctor.
Drug price negotiations hope to save Medicare estimated $98.5 billion For more than a decade, according to the Congressional Budget Office.
The negotiations are also expected to save money for people enrolled in Medicare. They take an average of four to five prescription drugs a month and increasingly face out-of-pocket costs that many struggle to pay.
Nearly 10% of Medicare beneficiaries over the age of 65 and 20% of those under 65 are having trouble buying medicines, a senior government official said on Tuesday.
Merck, Johnson & Johnson, Bristol-Myers Squibb, Astellas Pharma and others have filed lawsuits to stop the negotiation process. The industry’s largest lobby group PhRMA and the U.S. Chamber of Commerce have filed independent lawsuits.
The lawsuit makes similar, overlapping allegations that the Medicare negotiations are unconstitutional.
The companies argue that the deal will force drug makers to sell their medicines at deep discounts below market prices. They argue that this violates the Fifth Amendment, which requires the government to pay reasonable compensation for private property acquired for public use.
The lawsuit also said the process violated the drug companies’ First Amendment right to free speech, essentially forcing the companies to agree that Medicare was negotiating a fair price. It also claims that there are
They also argue that the deal violates the Eighth Amendment to the U.S. Constitution by imposing exorbitant fines on pharmaceutical companies if they refuse to participate.
Lawsuits are scattered in federal courts across the U.S. Legal experts say the pharmaceutical industry hopes to get conflicting rulings from federal appeals courts that could quickly bring the matter to the Supreme Court. There is
Some pharmaceutical companies have confirmed their intention to take legal battles to the country’s Supreme Court.
“Going forward, we will take this case to the fullest – through the District Court, and if necessary to the Circuit Court, and then to the Circuit Court,” Merck CEO Robert Davis said at a news conference. Ultimately, it will go all the way to the Supreme Court.” Financial results briefing at the beginning of this month. “So that’s really the strategy.”
Meanwhile, the Biden administration has made it clear that it will fight legal challenges.
Mr. Biden and his top health officials see the lawsuit as evidence that the battle to lower drug prices is gaining momentum.
“Big drug companies don’t want this to happen and are suing to stop us from negotiating price cuts to inflate their profits,” the president said. in a speech at the White House in July. “But we will get through this. We will continue to stand up to Big Pharma.”
Among the 10 drugs listed between June 1, 2022 and May 31, 2023, Medicare Part D spent the most on Eliquis, according to one report, at $16.5 billion. . CMS Factsheet.
The plan cost Jardiance $7 billion, Xarelto $6 billion, Januvia $4 billion and Fasiga $3.2 billion over the same period, according to the factsheet. Spending on Entresto, Enbrel, Imbruvica, Stelara and two insulins was over $2.5 billion each.
In calendar year 2022, more than 3.5 million registrants used Eliquis and paid an average out-of-pocket cost of $441 for blood thinners, according to another source. fact sheetfrom the Office of the Assistant Secretary for Planning and Evaluation (ASPE), Department of Health and Human Services.
About 1.3 million registrants used Jardiance in 2022, paying an average copay of $290, according to the ASPE factsheet. About 1.3 million beneficiaries used Xarelto, paying an average of $451 out-of-pocket.
According to the ASPE factsheet, Imbruvica and Stelara had far fewer registrants that year, at 22,000 and 20,000 respectively. But according to the ASPE factsheet, registrants paid the most out-of-pocket for these drugs, with Imbruvica averaging $5,247 and Stelara averaging $2,058.
Meanwhile, in 2022, 763,000 registrants used two Novo Nordisk insulin products and paid an average copay of $121, according to the ASPE factsheet.
Some of the drugs on the list were a surprise, including Fasiga and Stelara. Wall Street analysts and health policy researchers had hoped for other names, such as Eli Lilly’s diabetes drug Trulicity and Astellas Pharma’s rheumatoid arthritis drug Extandi.
Officials said the list likely diverged from projections due to changes in Medicare Part D spending.
“The data may now be lower on the list because usage may have declined in the last year or other drugs may have become more common,” the official said on a conference call. Stated.
