The Department of Health and Human Services plans to release in September a list of 10 Medicare-covered drugs it will target for price negotiations, the first phase in a long-anticipated attempt to lower costs for seniors.
HHS officials, speaking with reporters on Wednesday, laid out the federal government’s roadmap for negotiating drug prices through historic new powers it gained under the Inflation Reduction Act. The IRA, signed into law by President Joe Biden in August, authorizes HHS to negotiate prices directly with drug companies for drugs that cost Medicare Parts D and B the most money.
Medicare Part D covers prescription drugs that seniors fill in retail pharmacies. Part B covers more specialized medicines that are typically given in a doctor’s office or hospital.
In the first phase of the program, Health Secretary Xavier Becerra will select 10 drugs from a list of the 50 most expensive for Medicare Part D. To be eligible, the drug must have been on the market for at least seven years without generic competition. or 11 years for biological products such as vaccines.
The Department of Health will publish the list in September 2023, and HHS will make its first offer to pharmaceutical companies in February 2024. The companies have 30 days to accept the offer or submit a counter-offer.
Negotiations will end in August 2024, HHS will publish the agreed costs in September. The negotiated prices for these 10 Medicare Part D drugs will take effect in January 2026.
Under the Anti-Inflation Act, certain drugs are exempt from the negotiations. These include drugs for rare diseases, products derived from plasma or blood, drugs developed by small biotech companies, and drugs on which Medicare spends less than $200 million.
HHS has yet to tip its cards over what drugs it’s eyeing. The most recent publicly available Medicare Part D drug spending data is two years old. The federal government will use Medicare spending data from June 2022 through May 2023 to guide its selection.
These were the most expensive Medicare Part D drugs of 2020 in August, according to an analysis of data from Bank of America’s Center for Medicare and Medicaid Services. The products may not be part of eventual price negotiations due to generic competition or a Medicare change -Expenditure.
- Bristol-Myers’ Eliquis, $9.9 billion. It is an anticoagulant that prevents blood from clotting to reduce the risk of stroke.
- Bristol Myers‘Revlimid, $5.4 billion. It is a pill used to treat multiple myeloma.
- Xarelto by J&J, $4.7 billion. It’s another blood thinner.
- Merck’s Januvia, $3.8 billion. It is a blood sugar lowering pill for people with type 2 diabetes.
- Eli Lilli‘s Trulicity, $3.2 billion. An injection that helps people with type 2 diabetes release insulin.
- Abbvie’s Imbruvica, $2.9 billion. It’s a pill for different types of blood cancers.
- Sanofis Lantus Solostar, $2.7 billion. It’s an insulin pen for diabetes.
- Eli Lilli‘s Jardiance, $2.4 billion. It is a pill for lowering blood sugar in type 2 diabetes.
- Abbvie‘s Humira, $2.2 billion. It is a monoclonal antibody used to treat rheumatoid arthritis.
- Pfizer‘s Ibrance, $2.1 billion. It is a pill used to treat breast cancer.
- AstraZeneca‘s Symbicort, $1.98 billion. An inhaler used to treat asthma and COPD.
Many of the drugs are related to preventing or treating diabetes, blood clots, or cancer.
In the second phase of the program, HHS will select an additional 15 Medicare Part D drugs for negotiation, with prices taking effect in 2027.
In the third phase, the federal government can negotiate Part B drugs, the prices of which will come into force in 2028.
In phase four, HHS will negotiate prices for 20 Part B or D drugs that will take effect in 2029. The federal government can negotiate over 20 drugs in all subsequent years.
Bank of America estimated in an August analyst report that the negotiations could cut drug prices by 25% over the long term for the 25 drugs on which Medicare spends the most.
Comments are closed.