WASHINGTON/LAS VEGAS (Reuters) – U.S. President Joe Biden announced on Thursday that the Trump administration would impose inflation penalties on 27 pharmaceuticals. And he promised that further price cuts would be made.
Pharmaceutical companies raised the prices of 27 drugs above inflation in the last quarter. The difference in these medicines must be paid to Medicare, the government’s health care program for people over 65 and with disabilities.
“We’re going to change the way drugs are priced, and that will lower costs for seniors in the long run,” Mr. Biden said in Las Vegas.
Biden said he might be surprised to see companies like Eli Lilly (LLY.N) limit out-of-pocket insulin costs to $35 a month after publicly advocating for lower prices for diabetes drugs. . More coming. ”
The Inflation Reduction Act (IRA) signed by the president includes provisions that penalize pharmaceutical companies for rising prices faster than inflation for Medicare subscribers.
latest update
Show 2 more stories
White House domestic policy adviser Susan Rice said at a press conference ahead of Mr. You’re going to pay a lower coinsurance,” he said.
The Department of Health and Human Services (HHS) on Wednesday released initial guidance on how to conduct the pricing negotiation process for Medicare prescription drugs.
of list AbbVie’s (ABBV.N) blockbuster arthritis drug Humira, Gilead Sciences’ (GILD.O) Car-T cancer drug Yescarta and Siegen’s (SGEN.O) targeted cancer drug Padchef face inflation penalties the White House said. in the fact sheet.
Pfizer (PFE.N) has five drugs on its list, while Gilead, Endo International (ENDPQ.PK), Kamada (KMDA.TA) and Leadant Biosciences each have two. Johnson & Johnson (JNJ.N) and Roche (ROG.S) had one each.
Shares of most of the named pharmaceutical companies closed broadly flat, while Pfizer closed about 1% higher in normal trading.
Payments to Medicare come in the form of rebates. Failure to pay the rebate will result in a penalty of 125% of the rebate amount.
The government will begin charging companies for rebates in 2025, while Medicare will begin reducing member copays in April.
Wells Fargo analyst Mohit Bansal said in a research note that the direct impact on pharmaceutical companies appears small so far.
However, the announcement “provides a signal to the industry that the government is serious about curbing drug price increases, which may make companies more cautious about raising prices.” he said.
In October 2022, Medicare began considering price increases for Medicare Part B drugs that are often used in hospitals. This is either a complex biologic or one that the manufacturer has only one.
The government updates the drug list quarterly.
From 2019 to 2020, price increases in half of all Medicare-covered drugs outpaced average 1% inflation for the year. His one-third of them had gains over his 7.5%.
Reporting by Ahmed Aboulenein, Washington and Steve Holland, Las Vegas. Written by Nandita Bose, with additional reporting by Manas Mishra, Bangalore. Edited by Josie Kao, Heather Timmons, Bill Berkrot
Our criteria: Thomson Reuters Trust Principles.
