Ten companies register to participate in Medicare drug price negotiation program

Published: Oct 04, 2023

By Tristan Manalac

BioSpace

All 10 pharmaceutical companies whose products were selected for the first round of Medicare drug price negotiations have agreed to participate in the talks, the Department of Health and Human Services announced Tuesday.

The companies include Boehringer Ingelheim, J&J, Merck, Novartis, Immunex and Novo Nordisk. Last week, AstraZeneca and Bristol Myers Squibb said they had reluctantly signed on to the negotiation program under the Inflation Reduction Act (IRA).

Despite their participation, the pharmaceutical industry has strongly opposed the IRA’s Drug Price Negotiation Program. Several companies have filed lawsuits against the program, including Merck, Novartis and AstraZeneca.

However, with all 10 companies’ participation confirmed, the Centers for Medicare and Medicaid Services (CMS) can now move forward with the negotiation process, which will take place throughout the remainder of this year and into 2024, according to Tuesday’s HHS announcement.

This fall, CMS will hold listening sessions with patients, beneficiaries, consumer advocacy organizations, caregivers and other stakeholders. CMS will also meet with the pharmaceutical companies to discuss previous submissions that the agency will consider in determining a maximum fair price.

CMS will then make its initial offer for the selected pharmaceutical products, providing the companies with a “concise justification” for the maximum fair price. The deadline of the initial offer is Feb. 1, 2024. Companies will have a month to either accept CMS’ pricing or propose a counteroffer.

The negotiations will run until Aug. 1, 2024, and by Sept. 1 of the same year, CMS will publish the final maximum fair prices for the selected drugs. The new pricing will take effect in 2026.

In deciding on its offer, CMS will “consider the selected drug’s clinical benefit, the extent to which it fulfills an unmet medical need, and its impact on people who rely on Medicare,” HHS said in Tuesday’s announcement. The agency will also look at other factors, such as “costs associated with the research and development as well as costs associated with production and distribution.”

Signed into law in August 2022, the Inflation Reduction Act (IRA) aims to save the U.S. government some $25 billion in drug spending over the next eight years. To achieve this, the IRA empowers the CMS to renegotiate the prices for some of the most widely prescribed medications. In August 2023, the agency named the first 10 drugs that would enter negotiations.

In addition to type 2 diabetes therapy Farxiga (dapagliflozin) and blood thinner Eliquis (apixaban), the list included the diabetes treatments Jardiance (empagliflozin) and Januvia (sitagliptin), heart failure drug Entresto (sacubitril/valsartan) and psoriasis medicine Enbrel (etanercept).

“These companies manufacture some of the costliest and most commonly used prescription drugs,” HHS said in Tuesday’s announcement. “These selected drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20%, of total Part D gross covered prescription drug costs between June 1, 2022 and May 31, 2023, which is the time period used to determine which drugs were eligible for negotiation.”

Tristan Manalac is an independent science writer based in Metro Manila, Philippines. He can be reached at [email protected] or [email protected].

Source: BioSpace