Monday, May 20

US makes initial offers in Medicare drug price negotiations

The drugs selected for the negotiations are taken by millions of older Americans to treat conditions such as diabetes, cancer and heart failure. The administration identified them in August, starting a long process expected to result in an agreed-upon price that would take effect in 2026, assuming the negotiation program survives legal challenges.

The initial round of price offers is a critical step in the negotiation process. Each drugmaker has until early March to accept the offer or make a counteroffer to the government. A series of negotiating sessions could follow, expected to conclude by August.

Health policy experts said the announcement of the first round of offers amounts to something of a starting signal, giving the Biden administration a chance to take an aggressive stance and test drugmakers’ willingness to acquiesce.

The proposals help “set the tone for the rest of this back and forth,” said Andrew W. Mulcahy, a health economist at the RAND Corporation who has advised the Biden administration on implementing drug price negotiations.

Drugs subject to price negotiations include Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica and Stelara. The insulin products Fiasp and NovoLog were also selected. The administration has not publicly disclosed the amount offered for the drugs, which are covered by the Medicare program for prescription drugs that patients take at home, known as Medicare Part D.

The price negotiation program was created by the Inflation Reduction Act, the climate, tax and healthcare package signed into law by President Biden in 2022. More drugs will be chosen for price negotiations in the coming years. The program is expected to save the federal government nearly $100 billion over a decade.

The price negotiation program is a key component of the White House’s efforts to reduce everyday costs for Americans, and it’s a policy Biden may emphasize in his reelection campaign.

“Medicare is no longer accepting the prices that drug companies are charging for these drugs,” Biden said in a statement Thursday.

But the pharmaceutical industry hopes the courts will step in to shut down the program, which drugmakers say is unconstitutional. The industry has long argued that allowing the government to negotiate prices will limit private innovation and discourage companies from developing new drugs.

“This continues to be an exercise in scoring political points on the campaign trail rather than doing what is in the best interests of patients,” Alex Schriver, senior vice president at Pharmaceutical Research and Manufacturers of America, or PhRMA, said in a statement. . “Government bureaucrats are working behind closed doors to set drug prices without disclosing for months how they arrived at the price or how much patient and provider input was used.”

Lawsuits brought by drugmakers, PhRMA and the U.S. Chamber of Commerce remain pending in courts across the country. A federal judge in Delaware heard arguments Wednesday in a case brought by AstraZeneca, the maker of one of the drugs chosen for negotiations, Farxiga, a treatment for diabetes, heart failure and chronic kidney disease.