The Biden administration on Tuesday unveiled the first 10 prescription medications for which the Centers for Medicare and Medicaid Services (CMS) will negotiate Medicare prices directly with drug companies. The effort is part of a new program that’s faced pushback and legal challenges from the pharmaceutical industry.
The drugs selected for the Medicare Drug Price Negotiation Program—created as part of the 2022 Inflation Reduction Act—span treatments for diabetes, Crohn’s disease, cancer, and chronic heart failure.
Drug list:
- Eliquis (Bristol-Myers Squibb Company and Pfizer)
- Jardiance (Boehringer Ingelheim Pharmaceuticals and Lilly)
- Xarelto (Janssen Pharmaceuticals)
- Januvia (Merck & Co.)
- Farxiga (AstraZeneca)
- Entresto (Novartis Pharmaceuticals)
- Enbrel (Amgen)
- Imbruvica (Pharmacyclics, an AbbVie company, and Janssen Biotech)
- Stelara (Janssen Biotech)
- Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, and NovoLog PenFill (Novo Nordisk)
Negotiations with drug companies are expected to begin later this year, and negotiated prices should take effect in 2026—though legal challenges from PhRMA and others in the industry could affect that timeline.
Breaking it down
CMS Administrator Chiquita Brooks-LaSure said the negotiations aim “to improve access to some of the costliest drugs for millions of people with Medicare while driving competition and innovation.”
The 10 medications cost Part D Medicare enrollees a total of $3.4 billion in out-of-pocket expenses in 2022, and accounted for $50.5 billion in total Part D gross covered prescription costs (20%) between early June 2022 and late May 2023, according to the Department of Health and Human Services (HHS).
PhRMA President and CEO Stephen Ubl called Tuesday’s announcement “the result of a rushed process focused on short-term political gain rather than what is best for patients.”
Ubl added that many of the drugs selected for negotiations already have rebates and discounts through the private market negotiations that currently occur in the Part D program.
“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,” he said in a statement. “And insurance companies and their [pharmacy benefit managers] may further restrict access to medicines through increased utilization management, higher copays, and more restrictive formularies.”
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Despite the drug industry’s attempts to block Medicare from negotiating drug prices, HHS Secretary Xavier Becerra said the administration “will not be deterred.”
What’s next?
Drug companies with medications selected for the negotiation program have until October 1 to sign agreements indicating whether they will participate in the process for 2026, and until October 2 to submit manufacturer-specific data they think should be considered during the negotiations, according to CMS.
The public also has until October 2 to submit data on therapeutic alternatives to the selected drugs, how they tackle an unmet medical need, and the effects on specific populations. There is broad public support for the negotiations; a majority of both Republicans (77%) and Democrats (89%) back the program, according to a December 2022 KFF survey.
CMS will further hold a series of virtual “patient-focused listening sessions” in which patients, caregivers, and others can share input on each selected drug between October 30 and November 15. The agency will then send to drug companies an initial offer including the “maximum fair price,” or upper price limit, for selected medications by February 1, 2024.
The negotiation period is set to end August 1, 2024, and CMS plans to publish the maximum fair prices negotiated for 2026 by September 1, 2024. The agency aims to select additional medications—15 more in both 2027 and 2028, and 20 thereafter—for negotiations in the following years.