First 10 drugs subject to Medicare negotiations named
The identity of the first 10 medicines that will be subject to the first round of Medicare pricing negotiations has been revealed and, as expected, some big brands are in the firing line.
The 10 selected drugs include therapies for diabetes, heart failure, immunological disorders, and cancer, as well as anticoagulants, with Johnson & Johnson particularly exposed, as it has three major brands on the list.
Collectively, the drugs cost Medicare upwards of $50 billion a year – or about 20% of total Part D gross covered prescription drug costs between 1st June 2022 and 31st May 2023 – and generated $3.4 billion in out-of-pocket costs for patients in 2022, according to the Department of Health and Human Services (HHS).
Under the negotiation provisions of the Biden administration's Inflation Reduction Act (IRA), the HHS Secretary will be able to negotiate the prices of the selected drugs – which all have what HHS says is a "high budget impact" - that are provided via Medicare Parts B and D.
The full list of medicines appears below:
- Bristol-Myers Squibb and Pfizer's Eliquis (apixaban)
- Novartis' Entresto (valsartan/sacubitril)
- Amgen's Enbrel (etanercept)
- AstraZeneca's Farxiga (dapagliflozin)
- AbbVie and Johnson & Johnson's Imbruvica (ibrutinib)
- Merck & Co/MSD's Januvia (sitagliptin)
- Eli Lilly/Boehringer Ingelheim's Jardiance (empagliflozin)
- Novo Nordisk's Novolog/Fiasp (insulin aspart)
- Johnson & Johnson's Stelara (ustekinumab)
- Johnson & Johnson's Xarelto (rivaroxaban)
After the negotiation period, the new prices will be announced on 1st September 2024, and will go into effect on 1st January 2026 – that is, unless a string of lawsuits questioning the legality of the initiative are successful.
Just last week, AstraZeneca joined the lengthening list of organisations challenging Medicare's right to negotiate prices, along with Merck & Co/MSD, the US Chamber of Commerce, Bristol-Myers Squibb, Astellas, J&J, the Pharmaceutical Research and Manufacturers of America (PhRMA) industry group, and Boehringer Ingelheim.
The lawsuits claim the move is unconstitutional, violating the First, Fifth, and Eighth Amendments, arguing that there is no negotiation, but mandatory price-setting by the government, backed up by punitive fines if they do not comply.
In a statement released alongside the list, HHS Secretary Xavier Becerra remained defiant about the plan, saying: "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."
He added that, with the IRA, "we are closer to reaching President Biden's goal of increasing availability and lowering prescription drug costs for all Americans."
The Centers of Medicare and Medicaid Services (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 thereafter.
PhRMA's president and chief executive, Stephen Ubl, responded to the publication of the list with the following statement:
"Today's announcement is the result of a rushed process focused on short-term political gain, rather than what is best for patients. 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 programme today."
"Politics should not dictate which treatments and cures are worth developing and who should get access to them."
