By Michael Erman and Patrick Wingrove
Reuters – The U.S. government on Friday released revised guidance on Medicare’s drug-price negotiation program, saying it would allow pharmaceutical companies to publicly discuss negotiations at their discretion.
In September, the U.S. Centers for Medicare and Medicaid Services (CMS) selected the 10 most expensive prescription drugs in the Medicare program and will negotiate lower prices to go into effect in 2026.
Two major pharmaceutical companies, the US Chamber of Commerce and a major industry lobby group have filed lawsuits against the US government over the program, claiming it is unconstitutional.
Confidentiality provisions included in the original guidance announced in March were one of the issues raised by lawsuits regarding the program, but not the only one. The guidance prevented drug companies from talking about negotiations and required them to ultimately destroy data received from CMS.
CMS administrator Chiquita Brooks Rashua said at a press conference, “We’re doing everything we can to make sure it’s a voluntary process for manufacturers to negotiate directly with us.” said.
Merck & Co. and Bristol-Myers Squibb both allege in their lawsuits that price negotiations will force pharmaceutical companies to sell their drugs to Medicare at deep below-market discounts. They argue that this violates the Fifth Amendment, which requires the government to pay reasonable compensation for private property acquired for public use.
They also made separate First Amendment claims.
Americans pay more for prescription drugs than any other country. The Biden administration’s drug price reform aims to save Medicare $25 billion annually by 2031 through price negotiations on its most expensive drugs.
(Reporting by Michael Erman; Editing by Mark Potter)
