August 30, 2023
On Tuesday, August 29, the Biden Administration unveiled a long-awaited list of the first ten medicines that will be subject to price negotiations with Medicare—kicking off a landmark program that is expected to reduce the government’s drug spending but is being fought by the pharmaceutical industry in court, reports The New York Times.
The medications—which treat diabetes, cancer and other disorders—are taken by millions of older Americans and cost Medicare billions of dollars annually. The Centers for Medicare & Medicaid Services selected the drugs through a process that prioritized ones that account for the highest Medicare spending, have been on the market for years, and do not yet face competition from rivals. Additional medications will be selected for price negotiations in the coming years.
Drugs Selected for Price Negotiations
- Eliquis, for preventing strokes and blood clots, from Bristol Myers Squibb and Pfizer
- Jardiance, for diabetes and heart failure, from Boehringer Ingelheim and Eli Lilly
- Xarelto,for preventing strokes and blood clots, from Johnson & Johnson
- Januvia, for diabetes, from Merck
- Farxiga, for diabetes, heart failure and chronic kidney disease, from AstraZeneca
- Entresto, for heart failure, from Novartis
- Enbrel, for arthritis and other autoimmune conditions, from Amgen
- Imbruvica, for blood cancers, from AbbVie and Johnson & Johnson
- Stelara, for Crohn’s disease, from Johnson & Johnson
- Fiasp andNovoLog insulin products, for diabetes, from Novo Nordisk
The final list had some overlap with what experts had anticipated. Its release was an important moment for Democrats, who have campaigned on a promise to lower the cost of prescription drugs. President Joe Biden will mark the occasion with remarks at the White House on Tuesday afternoon, in another sign that he intends to make lowering health care costs a theme of his 2024 re-election campaign.
In a statement issued by the White House, the president called the negotiations “a key part of Bidenomics, my economic vision for growing the economy from the middle out and the bottom up—not the top down.”
Stephen J. Ubl, the chief executive of the Pharmaceutical Research and Manufacturers of America, the drug industry’s main lobbying group, called the announcement “the result of a rushed process focused on short-term political gain rather than what is best for patients.” He warned that it would “have significant negative consequences long after this administration is gone.”
Medicare gained the authority to negotiate the price of some prescription medicines when Congress passed the Inflation Reduction Act last year—a signature legislative achievement for the president. The announcement on Tuesday is a key step toward those negotiations, which will unfold over the coming months, with the new prices taking effect in 2026.
The ten selected medications range from very expensive drugs taken by relatively few older Americans to cheaper drugs taken by huge numbers of people.
Imbruvica, which in a recent 12-month period was taken by 20,000 Medicare beneficiaries with blood cancers, has a sticker price of $17,000 a month. The blood thinner, Eliquis, which was taken by 3.7 million beneficiaries, has a monthly sticker price under $600.
The negotiation program is projected to save the government an estimated $98.5 billion over a decade. It is also expected to eventually reduce insurance premiums and out-of-pocket costs for many older Americans, although the magnitude of those savings remains to be seen.
Research contact: @nytimes