First 10 drugs set for Medicare price negotiations: Will pharma participate?
Blood clot drugs Eliquis and Jardiance made the list, released on Tuesday, amid lawsuits filed by their manufacturers, attempting to block the government’s effort to control drug prices.
The Centers for Medicare & Medicaid Services on Tuesday morning announced the must-anticipated list of the first 10 drugs selected for Medicare price negotiation under the Inflation Reduction Act.
The list includes Eliquis, a Bristol-Myers Squibb drug to prevent blood clots used by more than 3.7 million people on Medicare in the year ending May 2023 at a cost of $16.4 billion to the program, and Xarelto, another blood thinner, made by Johnson & Johnson that is used by more than 1.3 million people on Medicare at a cost to the program of more than $6 billion.
Diabetes drugs Jardiance (Boehringer Ingelheim), Januvia (Merck), Farxiga (AstraZeneca) and Fiasp and Novolog (Novo Nordisk) are on the list, as are Enbrel (Amgen) and Stelara (Janssen), drugs used to treat rheumatoid arthritis, psoriasis and Crohn’s disease. Entresto, a Novartis drug used to treat types of heart failure and Imbruvica, an AbbVie drug that treats blood cancers, are also on the list.
Presently, most of the makers of these selected pharmaceuticals – Merck, Bristol-Myers Squibb, Johnson & Johsnon and Boehringer Ingelheim – are suing the U.S. Department of Health and Human Services over the drug price negotiation program.
“Today, my administration announced the first 10 Medicare Part D drugs that have been selected for price negotiation, for the first time ever,” President Joe Biden said in a statement. “They are among the most common and costly prescriptions that treat everything from heart failure, blood clots, diabetes, arthritis, Crohn’s disease and more. This is on top of progress we made in reducing the cost of insulin to $35 a month for seniors on Medicare.”
These single-source drugs were chosen based on their eligibility under the act and are the “highest total Part D gross covered prescription drug costs” under Medicare Part D, according to CMS. In total, these medications account for $50.5 billion in gross Part D costs. Negotiations over these drugs, if manufacturers agree to the process, will take place during 2023 and 2024.
Several manufacturers have said the new provisions are unconstitutional and have filed a series of lawsuits to try to stop them. The Pharmaceutical Research and Manufacturers of America said the change gives the government too much power and would hurt the innovation and investment needed for the Biden administration’s push to end cancer.
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“Today’s announcement is the result of a rushed process focused on short-term political gain rather than what is best for patients,” PhRMA CEO Stephen Ubl said in a statement.
Drugmakers have until October 1 to sign agreements on whether to participate in negotiations. CMS will publish the ” maximum fair prices” for these drugs in September 2024, and negotiated prices for these drugs will go into effect beginning in 2026.
“This is going to be a heavyweight battle,” said Ameet Sarpatwari, an assistant professor at Harvard Medical School.