CMS has revealed a list of 10 drugs, including Eliquis, Xarelto, Jardiance, and Januvia, subject to Medicare price negotiations. President Biden highlighted their significance in reducing costs for seniors, with an estimated 9 million beneficiaries benefiting from reduced out-of-pocket expenses. The Congressional Budget Office predicts potential taxpayer savings of $160 billion through negotiation and rebates. Legal battles loom as pharmaceutical companies contest the initiative’s constitutionality. This step is hailed as pivotal in reshaping the relationship between Big Pharma, the government, and Medicare beneficiaries, fostering lower drug prices and accessibility.
The Centers for Medicare & Medicaid Services (CMS) has unveiled its long-awaited roster of 10 drugs earmarked for Medicare price negotiations. Among the drugs included on this list are well-known blood clot prevention medications, Eliquis and Xarelto, alongside diabetes treatments Jardiance and Januvia.
The list also encompasses Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp. These selections, CMS states, were made with a focus on drugs that have been on the market for seven years.
In a statement, President Joe Biden shared, “Today, my administration announced the first 10 Medicare Part D drugs that have been selected for price negotiation — for the first time. 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 the progress we made in reducing the cost of insulin to $35 a month for seniors on Medicare.”
He further added, “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 (CBO) reports that this will save taxpayers $160 billion by reducing how much Medicare pays for drugs through negotiation and inflation rebates.”
Dr. Meena Seshamani, CMS Deputy Administrator and Director of the Center for Medicare, emphasized transparency and engagement as integral to implementing the new drug law and the Medicare Drug Price Negotiation Program. Seshamani noted that a patient-focused listening session for each selected drug will be hosted by CMS to gather direct input from patients and other stakeholders.
While the pharmaceutical industry has criticized the provision within the Inflation Reduction Act, a significant legislative achievement from just over a year ago, supporters of price negotiation view the list as an essential initial step in curbing out-of-pocket expenses for prescription drugs. This is especially crucial for patients lacking insurance. It also marks a milestone for federal regulators in their efforts to address the pharmaceutical industry.
The Congressional Budget Office (CBO) projected that the drug pricing provisions in the Inflation Reduction Act will only minimally impact research and development (R&D), estimating a 1% reduction over the next three decades.
Effective implementation of the new prices is slated for 2026. Drug manufacturers have until October 1 to determine their participation in negotiations, though legal actions could potentially delay the program. Manufacturers declining negotiations would face substantial excise taxes on nationwide sales, likely compelling them to accept the negotiated prices. After negotiations, companies can choose to accept the terms or withdraw from Medicare and Medicaid.
Senator Bernie Sanders rejected the notion that this plan is radical, citing the Veterans Administration’s three-decade-long engagement in similar practices. He emphasized that confronting pharmaceutical avarice should extend beyond this initiative.
Senator Ron Wyden viewed this step, combined with other cost-cutting measures in the Inflation Reduction Act, as a transformative change in the dynamic among Big Pharma, the federal government, and seniors seeking reduced prices.
Numerous lawsuits have been lodged against the Department of Health and Human Services (HHS), the overseeing body for CMS, in recent months. Drug companies such as Merck, Bristol Myers Squibb, PhRMA, Boehringer Ingelheim, Astellas, Johnson & Johnson, and AstraZeneca have taken the matter to court, contesting different aspects of the new program’s constitutionality.
AARP has supported HHS in one federal lawsuit, affirming the agency’s authority to negotiate drug prices with pharmaceutical companies, a move anticipated to yield billions of dollars in savings for both Medicare and beneficiaries.
