CMS released its highly anticipated list of 10 drugs subject to Medicare price negotiations Tuesday, which includes popular blood clot prevention drugs Eliquis and Xarelto and diabetes drugs Jardiance and Januvia.
Other drugs included in the list are Farxiga, Entresto, Enbrel, Imbruvica, Stelara and Fiasp. CMS said they picked drugs that have elapsed for seven years.
“Today, my administration announced the first 10 Medicare Part D drugs that have been selected for price negotiation — for the first time ever,” said President Joe Biden 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.“
"When implemented, prices on negotiated drugs will decrease for up to 9 million seniors,” he added. “These seniors currently pay up to $6,497 in out-of-pocket costs per year for these prescriptions. In addition, the nonpartisan Congressional Budget Office (CBO) reports that this will save taxpayers $160 billion by reducing how much Medicare pays for drugs through negotiation and inflation rebates.”
“Promoting transparency and engagement continue to be at the core of how we are implementing the new drug law and the Medicare Drug Price Negotiation Program, and that is why we set out a process for the first round of negotiation that engages the public throughout,” said Meena Seshamani, M.D., CMS Deputy Administrator and Director of the Center for Medicare. “Along with the announcement of the selected drugs, we announced CMS’ plans to host a patient-focused listening session for each selected drug to hear directly from patients and others.”
The pharmaceutical industry has attacked the provision under the Inflation Reduction Act, landmark legislation passed just over a year ago. They say the decision picks winners and losers, as well as disincentivizes innovation in the pharma startup space.
But supporters of price negotiation stood proudly behind the list as an important first step to reign in out-of-pocket costs making prescription drugs largely unavailable for patients, especially those without insurance. It also serves as a victory lap for federal regulators finally able to push back against the pharmaceutical industry.
The CBO estimated that drug pricing provisions in the IRA will only have a marginal impact on R&D, accounting for a reduction of 1% over the next 30 years, reported KFF.
Prices won’t take effect until 2026. Drug companies have until Oct. 1 to decide whether to participate in negotiations, though that could be delayed if lawsuits delay the program. If a manufacturer refuses to negotiate, they will be subject to a substantial excise tax on sales nationwide, likely leaving companies no choice but to accept negotiated prices. After negotiations a company can either accept the deal or withdraw from Medicare and Medicaid, reports Politico.
Sen. Bernie Sanders rejected the notion that the plan is a radical idea. He said in a statement Tuesday that the Veterans Administration has been doing this for 30 years, and that taking on pharmaceutical greed should not stop here.
"While the pharmaceutical industry makes huge profits every year, the American people pay, by far, the highest prices in the world for prescription drugs," he said. "And that situation is getting worse. Last year, the median price of new drugs approved by the FDA was over $220,000."
“This step, plus other cost saving measures in the Inflation Reduction Act, represent a seismic shift in the relationship between Big Pharma, the federal government, and seniors who are counting on lower prices,” said Sen. Ron Wyden in a statement.
More than half a dozen lawsuits have been filed against the Department of Health and Human Services, which oversees CMS, in recent months. Drug companies bringing the issue to court include Merck, Bristol Myers Squibb, PhRMA, Boehringer Ingelheim, Astellas, Johnson & Johnson and AstraZeneca, Fierce Pharma reported. They’re arguing various elements of the new program are unconstitutional.
AARP supported HHS in one federal lawsuit, agreeing that the agency has the ability to negotiate drug prices with pharmaceutical companies and that it will save Medicare and beneficiaries billions of dollars