More than a decade after Democrats first voted for the proposal, Medicare is finally set to begin negotiating prices for certain prescription drugs.
This week, the federal government announced 10 drugs included in the first phase negotiations. The new price he plans to go into effect in 2026.
The 10 drugs on the list are diverse. Some are priced in the low thousands of dollars a year and used by millions of people. Some cost over six figures per year and are taken by far fewer patients. The list represents a multifaceted situation in which high drug prices put pressure on both patients and insurers, increasing the risk that people will not get the drugs they need.
Even if you don’t take these medications, bargaining should help if you have Medicare.parliament used Estimated $99 billion savings It will take more than a decade to limit annual co-payments to $2,000 for all Medicare beneficiaries.
“Everybody will benefit,” Vanderbilt University health policy professor Stacey Dusetsina, who is on the program’s congressional advisory board, told me. “There is a safety cap of $2,000.”
This bargaining program is a milestone for the US healthcare system. The federal government’s largest health care program (by spending) is using its enormous clout to block the high prices that pharmaceutical companies charge for their products. The U.S. pays more for prescription drugs than any other country in the world, but the U.S. government has limited power to drive prices down compared to other countries’ healthcare systems. Created by the Control Inflation Act, this new program gives Medicare a powerful new tool.
Now that the first 10 drugs have been selected, the process can begin. Here’s the deployment:
- Pharmaceutical companies have signed contracts to participate in negotiations and have a month to submit data for Medicare to consider negotiated prices.
- By February 1, 2024, Medicare will provide initial pricing for select drugs. He is then given one month before the manufacturer accepts or submits a counterbid.
- There will be an opportunity for negotiations from spring to summer next year. Medicare will then announce final pricing in September 2024. The program will start paying these fees in 2026.
The process will begin anew in February 2025 with Medicare announcing 15 more drugs to be negotiated, with prices set to take effect in 2027. Each year thereafter, more drugs are added to the bargaining program.
That is, if the court allows negotiations to continue. The pharmaceutical industry has already filed a series of lawsuits, each with its own legal basis, to block the program before it can begin. Many legal experts believe the lawsuit will fail. How can a sustainable program run if the government has no discretion over the price of medicines? — But the rulings in these lawsuits will ultimately determine whether Medicare drug negotiations, which test the potential to save US patients and government money, will be allowed.
Meanwhile, the drugs Medicare plans to negotiate can be split into two buckets.
1) extremely expensive drugs for chronic diseases taken by hundreds of thousands and even millions of people
Seven out of 10 drugs for which negotiations have been announced fit into this category.
- Eliquis, treatment and prevention of blood clots (List price $561 1 month)
- Jardiance to treat diabetes and heart failure (List price $570)
- Xarelto treats and prevents blood clots and reduces associated risks in heart disease patients (List price $542)
- Januvia to treat diabetes (List price $586)
- Farxiga to treat diabetes, heart disease and chronic kidney disease (List price $549)
- Entresto to treat heart failure (List price $545)
- Classes of insulin syringes and their refill products: Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, and NovoLog PenFill
What ties these drugs together is that many Americans take them. This is likely because diabetes and heart disease are among the most common chronic diseases in the United States and should be taken regularly. Over 580,000 enrolled in Medicare took Entresto from June 2022 to May 2023. Over one million people were prescribed Xarelto and Jardiance. Eliquis is the most commonly used drug on the list, taken by more than 3.7 million people. Medicare costs during this period were approximately $16.5 billion.
Even if most Medicare subscribers don’t pay the list price, prescription drug coverage may be part of the tab, but it can still affect the price they pay. Patients may have to meet deductibles before benefits begin, or they may be responsible for coin insurance payments calculated on the list price.
These drugs also help people manage chronic health conditions and avoid more expensive health problems in the future. If cost is forced to stop taking a drug, the consequences can be severe. In particular, insulin subject to distributionwhich may reduce its effectiveness in the long run, causing serious emergencies and situations in some cases. even death for the patient. (The IRA also includes a provision that caps Medicare patients’ monthly insulin costs at $35.) Studies show that even the $10 extra cost can reduce the amount of medication you need. I found out.
Medicare negotiations will not solve all these problems. But they do save patient and program money, and under the IRA, these government savings are used to limit drug costs for older people who participate in the program.
2) super-expensive drugs for people with serious, potentially life-threatening illnesses
The second group of drugs covered by Medicare negotiations is taken by far fewer people. But for those who need them, their ability to afford them could determine life or death in the very near future.
- Enbrel to treat rheumatoid arthritis, psoriasis and psoriatic arthritis (List price $1,762 dose for one week)
- Imbruvica (List price $13,546 (equivalent to approximately one month’s worth of tablets)
- Stelara treats psoriasis, psoriatic arthritis, Crohn’s disease, and inflammatory bowel disease (List price $25,497 8 weeks)
Number of Medicare Patients Affected range From about 20,000 in Stelara and Imbruvica to about 50,000 in Enbrel. Nonetheless, these drugs each cost the Medicare program more than $2.6 billion from June 2022 to May 2023.
These patients, in particular, will benefit from negotiated prices and new out-of-pocket caps set by Congress, Dusetsina said. The old Medicare benefit design could have required you to spend more than $10,000 a year on medication. Currently, that cost does not exceed $2,000 per year.
This is the tragedy of America’s drug price crisis. The pharmaceutical industry has developed and produced great treatments that can stop cancer or help people live with potentially debilitating illnesses.
However, it is all too likely that these treatments will cost too much for patients to pay, or require insurance companies to raise everyone’s premiums to cover the costs, or both. many. Notoriously ungenerous health insurance has exacerbated the affordability crisis, but so has the blank slate given to drug companies under the current policy regime. Pharmaceutical companies can set any price they want while their products are protected by patents. Ducetsina said that with the initial list’s focus on (relatively) low-cost drugs for chronic diseases, the next round will focus on the most expensive drugs for serious acute diseases such as cancer. He told me he wouldn’t be surprised if he left.
Historically, pharmaceutical companies have argued that health insurance companies negotiate these prices down so that no one really has to pay. They’ll even say that Medicare already has various private Part D plans negotiating prices on behalf of patients.
It was true. But because each Part D plan represents fewer people than Medicare as a whole, Medicare can’t use all its power to try and lower prices for everyone. (there is 800+ Part D Plans.) Now that is finally about to change.
