The U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced Tuesday that President Biden’s Inflation Reduction Act will allow Medicare to negotiate drug prices for the first time with participating drug companies.
“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. But thanks to the landmark Inflation Reduction Act, we are closer to reaching President Biden’s goal of increasing availability and lowering prescription drug costs for all Americans,” said HHS Secretary Xavier Becerra in a statement. “Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred. The Biden-Harris Administration will continue working to ensure that Americans with Medicare have access to innovative, life-saving treatments at lower costs.”
The Medicare Drug Price Negotiation Program will open price negotiations for 10 drugs covered under Medicare Part D. The selected drugs include Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill.
Negotiations will occur in 2023 and 2024, with the negotiated prices going into effect in 2026. According to the announcement, the negotiation process will take into consideration the drug’s clinical benefit, the extent to which it fulfills an unmet medical need, and its impact on people who rely on Medicare. Other factors such as costs associated with research and development as well as production and distribution will also be considered.
“Today marks a significant and historic moment for the Medicare program with the announcement of the first drugs selected for Medicare drug price negotiation,” said CMS Administrator Chiquita Brooks-LaSure in a statement. “Our goal with these negotiations is to improve access to some of the costliest drugs for millions of people with Medicare while driving competition and innovation.”
According to CMS, the drugs selected for negotiation accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20 percent, of total Part D gross covered prescription drug costs between June 1, 2022, and May 31, 2023, which was the period in which the drugs eligible for negotiation were determined.
CMS will select up to 15 additional drugs covered under Medicare Part D open for negotiation for 2027, up to 15 more drugs covered under Part B and Part D for 2028, and up to 20 additional drugs for each following year thereafter.
Click here to view a fact sheet from CMS on the drugs selected for the Medicare Drug Price Negotiation Program.