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Pharmaceutical companies have received initial pricing offers from the Centers for Medicare and Medicaid Services.
CNN
—
Let’s start negotiating!
The Biden administration on Thursday sent its first offers to drug companies participating in the historic first round of Medicare drug price negotiations.
The move begins six months of discussions between manufacturers and the Centers for Medicare and Medicaid Services. The move comes as President Joe Biden seeks to tout efforts to lower drug prices ahead of the November presidential election and drug companies seek to halt the negotiation process in court.
“For the first time in history, Medicare is offering fair value offers for 10 of the most widely used and expensive drugs,” Biden said in a statement. “Medicare will no longer accept the prices demanded by drug companies for these drugs.”
Negotiations will take place between now and August 1st. The agreed maximum fair price will be published by September 1 and will take effect in 2026.
The first 10 drugs are Eliquis, Jardiance, Xarelto, Januvia, Faxiga, Entresto, Enbrel, Imbruvica, Stelara, Fiasp, and certain other insulins made by Novo Nordisk, including Novolog. These drugs, which treat conditions such as heart disease, certain cancers, diabetes and autoimmune diseases, will cost Medicare $46.5 billion in 2022, with enrollees paying $3.4 billion out of pocket.
Pharmaceutical companies and industry groups, including Bristol-Myers Squibb, Merck & Co., Johnson & Johnson’s Janssen unit, Novo Nordisk and AstraZeneca, have filed multiple lawsuits in federal courts across the U.S. seeking to block the effort. is happening. They each argue that the program violates the Constitution in different ways.
Some said they were effectively forced to participate, forced to withdraw from the Medicare and Medicaid markets, or face steep fines.
The Pharmaceutical Research and Manufacturers Association, the industry’s main lobbying group, blasted the original proposal, calling the effort “more about scoring political points on the campaign trail than serving the best interests of patients.” It continues to be a training program.”
“Government officials won’t reveal for months how prices were determined or how much patient and provider input was used,” PhRMA spokesperson Alex Schreiber said in a statement. They are still setting drug prices behind closed doors.” “This lack of transparency and unchecked authority will have a lasting impact on patients long after this administration leaves.”
Government officials declined to discuss the status of the deal with manufacturers, but Health and Human Services Secretary Xavier Becerra told reporters that the parties “have an opportunity to go back and forth until we agree on new pricing.” Stated.
“These are good faith up-front negotiations, not pricing. It takes both parties to arrive at a fair price,” he said.
CMS considered multiple factors when developing the first product, including the clinical benefits of the drug and the price of alternatives. The agency also held listening sessions for patients and others to provide input on the selected drugs. Discounts range from at least 25% to 60% off the non-federal manufacturer’s average price, depending on when the drug was approved.
The effort was authorized by the Inflation Control Act, which Democrats passed in Congress in 2022. After this first round, the Secretary of Health and Human Services could negotiate 15 more drugs for 2027, with that number increasing again in 2028. By 2029, that number will increase to 20 types per year. onwards.
During the first two years of negotiations, CMS will select only Part D drugs that are purchased at pharmacies. Doctor-administered Part B drugs will also be added in 2028.
The program is expected to save Medicare nearly $100 billion over 10 years, according to the Congressional Budget Office. It’s unclear how much subscribers will save.
This story has been updated with additional information.
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