As part of the Inflation Reduction Act, Medicare can now negotiate drug prices with the pharmaceutical companies that produce them. Tuesday, during a White House press conference, the Centers for Medicare and Medicaid Services unveiled its list of the first 10 drugs for which it will negotiate drug prices in coming months.

“Today is the start of a new deal for patients where Big Pharma doesn’t just get a blank check at your expense and at the expense of the American people,” President Joe Biden said. “Big Pharma is charging Americans more than three times what they charge other countries simply because they could.”

The negotiated prices will be effective in 2026.

According to a U.S. Department of Health and Human Services announcement, the savings are expected to be substantial, as “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.”

Health and Human Services Secretary Xavier Becerra said the move is part of the Biden administration’s effort to increase availability and reduce prescription drug costs “for all Americans.”

Reuters quoted Biden: “Once implemented, the prices on negotiated drugs will decrease for up to 9 million seniors who currently pay as much as $6,497 in out-of-pocket costs per year for these prescriptions.”

The Congressional Budget Office has estimated that the price negotiation could save Medicare $98.5 billion over 10 years.

List of drugs

The drugs subject to price negotiation first are:

  • Eliquis for prevention and treatment of blood clots.
  • Jardiance to treat diabetes and heart failure.
  • Xarelto for prevention and treatment of blood clots and risk reduction related to coronary or peripheral artery disease.
  • Januvia for diabetes.
  • Farxiga for diabetes, heart failure and chronic kidney disease.
  • Entresto for heart failure.
  • Enbrel to treat rheumatoid arthritis, psoriasis and psoriatic arthritis.
  • Imbruvica for blood cancers.
  • Stelara for psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis.
  • Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill for diabetes.

The department said that, in total, those drugs cost the Medicare Part D program $50.5 billion — or 20% of total Part D prescription costs — between June 1, 2022, and May 31, 2023. That time period was used to determine which high-volume/cost drugs were eligible for the first round of negotiations.

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Of the drugs on the list, Eliquis is used by the most Medicare Part D drug benefit enrollees: 3.7 million; 1.6 million are prescribed Jardiance and 1.4 million Xarelto. Even Imbruvica, which is prescribed for the fewest enrollees of the drugs listed, has been used by 20,000, according to a department fact sheet.

For 2027, future negotiations will include 15 more drugs covered under Part D and up to 15 more for 2028. That year will include drugs covered under both Part D drug coverage and Part B, which covers outpatient hospital services, doctor office visits and more. After that, up to 20 drugs can be negotiated each year.

Drug companies fight back

According to CNN, “The drug industry and their supporters, however, are determined to quash the effort, filing at least eight lawsuits in recent weeks declaring it unconstitutional.”

Adds the article, “Undaunted, the Centers for Medicare and Medicaid Services forged ahead with its historic new power, which Democrats have long argued is a way to lower drug prices.”

CNBC reported that “Merck, Johnson & Johnson, Bristol-Myers Squibb and Astellas Pharma are among the companies suing to halt the negotiation process. The industry’s biggest lobbying group, PhRMA, and the U.S. Chamber of Commerce have filed their own lawsuits. “

The suits make “similar and overlapping claims that Medicare negotiations are unconstitutional,” including saying it violates the 5th Amendment, which says government must pay “reasonable compensation for private property taken for public use,” CNBC said.

CNN reported that the U.S. Chamber of Commerce called the White House’s celebration “premature.”

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