Eliquis, Jardiance and Xarelto lead CMS list of drugs subject to negotiation
Negotiations with participating drug companies will occur in 2023 and 2024, and prices will become effective beginning in 2026.
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The Centers for Medicare and Medicaid Services has released the names of 10 drugs that will be subject to federal price negotiation in the Medicare program.
The selected drug list for the first round of negotiation is:
- Eliquis
- Jardiance
- Xarelto
- Januvia
- Farxiga
- Entresto
- Enbrel
- Imbruvica
- Stelara
- Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill
The negotiations with participating drug companies will occur in 2023 and 2024, and any negotiated prices will become effective beginning in 2026.
President Biden released this statement: "When implemented, prices on negotiated drugs will decrease for up to 9 million seniors. 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 reports that this will save taxpayers $160 billion by reducing how much Medicare pays for drugs through negotiation and inflation rebates."
WHY THIS MATTERS
CMS said these selected drugs accounted for $50.5 billion, or about 20%, of total Part D gross covered prescription drug costs between June 1, 2022, and May 31, 2023, which is the time period used to determine which drugs were eligible for negotiation.
CMS will publish any agreed-upon negotiated prices for the selected drugs by Sept. 1, 2024; those prices will go into effect starting Jan. 1, 2026.
In future years, CMS will select for negotiation up to 15 more drugs covered under Part D for 2027, up to 15 more drugs for 2028 (including drugs covered under Part B and Part D), and up to 20 more drugs for each year after that, as outlined in the Inflation Reduction Act (IRA).
The Pharmaceutical Research and Manufacturers of America has sued the Department of Health and Human Services over what it calls price setting.
"Today's announcement is the result of a rushed process focused on short-term political gain rather than what is best for patients," PhRMA President and CEO Stephen J. Ubl said. "Many of the medicines selected for price setting already have significant rebates and discounts due to the robust private market negotiation that occurs in the Part D program today. Giving a single government agency the power to arbitrarily set the price of medicines with little accountability, oversight or input from patients and their doctors will have significant negative consequences long after this administration is gone. And insurance companies and their PBMs may further restrict access to medicines through increased utilization management, higher copays and more restrictive formularies."
Incubate Coalition Executive Director John Stanford has also spoken against CMS' negotiations, saying it would affect investment in small molecule drugs, which come in pill form.
"Seven of the 10 drugs named by CMS for government price setting are small molecules," Stanford said. "Numerous biotech companies have already scaled back research into experimental small-molecule treatments due to the IRA's arbitrary price-setting timelines. Targeting small-molecule drugs for price controls earlier than biologics will force life sciences firms to reconsider a broad array of risky projects, including developing cutting-edge small-molecule therapies for a range of diseases from cancer to Alzheimer's."
However, AARP EVP and Chief Advocacy and Engagement Officer Nancy LeaMond said, "AARP applauds CMS for taking this next critical step to bring down out-of-control prescription drug prices. For too long, big drug companies have fleeced our country and padded their profits by setting outrageous prices, all at the expense of American lives. The number one reason seniors skip or ration their prescriptions is because they can't afford them. This must stop."
THE LARGER TREND
The Inflation Reduction Act allows Medicare to negotiate the prices of prescription drugs.
Medicare enrollees taking the 10 drugs covered under Part D selected for negotiation paid a total of $3.4 billion in out-of-pocket costs in 2022 for these drugs, CMS said.
Since the IRA became law, HHS has introduced several initiatives to lower drug prices, such as capping the cost of insulin at $35 a month.
ON THE RECORD
"For far too long, pharmaceutical companies have made record profits while American families were saddled with record prices and unable to afford life-saving prescription drugs. But thanks to the landmark Inflation Reduction Act, we are closer to reaching President Biden's goal of increasing availability and lowering prescription drug costs for all Americans," said HHS Secretary Xavier Becerra. "Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred. The Biden-Harris Administration will continue working to ensure that Americans with Medicare have access to innovative, life-saving treatments at lower costs."
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
