When do Medicare patients taking 1 of 10 drugs pay less?
January 1, 2026.
However, several factors can complicate that schedule. This includes the results of several lawsuits challenging the constitutionality of the law and the results of the 2024 presidential election.
If the law goes as prescribed, the final negotiated price for the product will not be reached until September 1, 2024.
However, Medicare patients will see some price easing by 2026. Beginning in 2025, another provision of the Control Inflation Act will limit beneficiary Medicare Part D copayments to $2,000 annually.
CMS also capped the monthly supply of insulin at $35 earlier this year.
After the prices for the 10 drugs are finalized, standalone Part D plans and Medicare Advantage plans require drugs to be registered on prescriptions at the negotiated prices.
How does negotiation work?
Businesses have until October 1 to decide whether to participate in the talks. Failure to do so may result in up to 90 percent sales tax on product sales.
If the company agrees, it plans to meet with officials this fall to provide product-specific data. CMS said it plans to hold patient-centered hearing sessions for each of the 10 drugs.
CMS plans to send initial price offers to companies by February 1, and drug companies have 30 days to decide whether to accept the offer or decide to exit Medicare and Medicaid. .
According to the revised CMS guidance released in June, “When developing the initial proposal, CMS should begin with evidence relevant to alternative therapies and consider other factors such as research and development costs and the production and distribution of the drug of choice. will be considered.”
CMS will hold up to three meetings with each company to determine pricing over the spring and summer of 2024.
The negotiation period will end on August 1st, and CMS will announce the final price one month later.
CMS has until March 1, 2025 to explain its final pricing decisions.
Why isn’t Medicare bargaining for more drugs?
The IRA allows CMS to select only 10 drugs in the initial negotiations.
However, the law allows CMS to increase the number of drugs it negotiates in the following year.
For 2027, CMS will be able to negotiate prices for 15 more products. By 2028, the agency will be able to negotiate 15 additional Medicare Part D and Part B drugs, which cover medicines taken in the clinic, such as intravenous cancer treatments.
Each year from 2028 onwards, the authorities will be able to select 20 medicines for negotiation.
The criteria for drug selection are likely to remain the same for years to come. CMS will consider the drug’s clinical benefits, whether it addresses an unmet need, and its impact on Medicare’s patient population.
If I have private insurance, will this affect the price of my medicines?
Americans with private insurance are not directly affected by the price they pay for medicines as a result of Medicare’s price negotiations.
But according to Larry Levitt, executive vice president of health policy at the KFF, the downstream impact on drug companies’ pricing in the private market could materialize.
One possible scenario is that the announcement of price cuts on medicines subject to Medicare negotiations could cause companies to put the brakes on prices in the private market, citing public shame. Another possibility, he said, is that pharmaceutical companies, knowing that Medicare reimbursements will be reduced in the future, will try to get as much profit as possible from private insurers. It says.
“I don’t think anyone knows exactly how it will play out,” Levitt said. “One of the arguments is that drug companies are already maximizing their prices and profits … so the fact that Medicare gets lower prices for some of these drugs is a big deal for private insurers and their coverage. It should not affect the price people pay.”
Is Congress considering expanding this drug price negotiation program?
President Joe Biden’s fiscal 2024 budget proposes to allow Medicare to negotiate prices more quickly after a new drug is approved, as well as to increase the number of drugs that are subject to price negotiations. We estimate that this provision will save us $160 billion over 10 years.
The top Democrat House of Representatives introduced a bill in July that would expand the reach of the Medicare drug price negotiation program. These include increasing the number of drugs added to the program from 20 to 50 from 2029 and increasing the IRA cap on drug costs above inflation. with private insurance.
But with Republicans holding a narrow majority in the House, both bills are very likely to die this Congress.
“The more successful Medicare price negotiations are, the more pressure there will be to expand Medicare,” Levitt said. “If Republicans swept Congress and the White House, [in the 2024 elections]It’s entirely possible that attempts will be made to roll back Medicare price negotiations or delay negotiations before they take effect. ”
