Biden Administration Unveils First 10 Drugs for Medicare Price Negotiation

 Biden Administration Unveils First 10 Drugs for Medicare Price Negotiation

The Biden administration has revealed a list of 10 prescription medications that will undergo historic price negotiations under the U.S. Medicare health program. This program covers around 66 million individuals, primarily Americans aged 65 and over. Among the drugs subject to negotiation is the widely-used blood thinner Eliquis, co-manufactured by Bristol Myers Squibb and Pfizer.

The initiative stems from President Joe Biden’s Inflation Reduction Act, a legislation passed the previous year. This act empowers the Medicare program to engage in price negotiations for some of the most expensive drugs.

President Biden emphasized that Americans should not have to pay more for life-saving prescriptions compared to citizens in other developed nations. He anticipates that implementing these negotiated prices will lead to reduced costs for up to 9 million seniors who currently face substantial out-of-pocket expenses for these medications, which can amount to as much as $6,497 annually.

The list of medicines slated for negotiation includes various drugs such as Januvia for diabetes from Merck & Co, Xarelto from Johnson & Johnson (a competitor to Eliquis), and Imbruvica for leukemia by AbbVie.

Additional drugs on the list encompass Enbrel for rheumatoid arthritis from Amgen, Jardiance for diabetes co-manufactured by Boehringer Ingelheim and Eli Lilly, Stelara for arthritis and Crohn’s disease by J&J, and insulin from Novo Nordisk.

The unveiling of these medications marks the initial phase of the negotiation process. The revised prices for these 10 drugs are projected to come into effect in 2026. The ultimate aim of the program is to realize annual savings of $25 billion on drug costs by 2031.

Previously, U.S. laws had prevented the Medicare drug program from bargaining with pharmaceutical companies for drug prices. This new development is a departure from the program’s approach over the last two decades.

During the period from June 2022 to May 2023, the U.S. Centers for Medicare and Medicaid Services spent approximately $50.5 billion on the 10 listed drugs. This expenditure constitutes around 20% of the total drug costs under the Medicare prescription drug program, known as Part D.

While the move is welcomed by some for its potential cost reduction benefits, certain drug manufacturers have expressed concerns. Companies such as Novartis, Eli Lilly, and Merck fear that the pricing regulations could hinder innovation in the pharmaceutical sector and potentially impact the quality of care.

In response, Bristol Myers CEO Giovanni Caforio stated that the inclusion of Eliquis will not significantly affect the company’s long-term strategy. Caforio did highlight potential access restrictions for Medicare enrollees using the drug due to unintended consequences of the law.

The selected 10 drugs were chosen based on specific criteria outlined by Medicare. These criteria include being available in pharmacies, having limited generic alternatives, and being on the market for a minimum of nine years, or 13 years for more complex biotech drugs.

While the inclusion of these revenue-generating drugs on the list may concern pharmaceutical companies, the presence of impending competition after 2026 is expected to temper their profitability.

In conclusion, the Biden administration’s move to enable Medicare to negotiate drug prices for the first time has substantial implications for both seniors’ healthcare costs and the pharmaceutical industry’s dynamics.

Share your love

Leave a Reply

Your email address will not be published. Required fields are marked *