Biden admin announces first 10 drugs facing Medicare price negotiation
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The blood-thinners Eliquis and Xarelto are among the 10 prescription medicines the Biden administration will seek lower Medicare prices for under a new program allowing the government to negotiate drug prices for America's seniors.
Why it matters: The administration's landmark announcement Tuesday detailed the first-ever set of drugs subject to Medicare price negotiations, a longtime Democratic priority included in last year's Inflation Reduction Act over drug companies' fervent objections.
Other drugs up for negotiation include:
- Jardiance, a diabetes drug.
- Januvia, also for diabetes.
- Farxiga, another diabetes drug.
- Entresto, for heart failure.
- Enbrel, for arthritis and psoriasis.
- Imbruvica, a blood cancer drug.
- Stelara, used on psoriasis, Crohn's disease and other illnesses.
- Fiasp, also used for diabetes.
Of note: Insulin is already subject to a $35 monthly co-pay cap for Medicare prescription drug plan enrollees under a different provision of the IRA.
What they're saying: During remarks at the White House on Tuesday afternoon, Biden tied the announcement to his economic revitalization platform.
- "Lowering prescription drug costs is part of a much broader vision for the country, growing the economy from middle out and the bottom up, not the top down," he said.
State of play: The drugs' manufacturers will have just over a month to decide whether to participate in negotiations — which the industry is battling in court — or sit out the process, at the risk of significant financial penalty.
- Drugmakers who refuse to negotiate with Medicare face an excise tax of up to 95% of their U.S. sales, or they can withdraw their drugs from Medicare and Medicaid coverage, shutting them out of huge markets.
The other side: "The cancer moonshot will not succeed if this administration continues to dismantle the innovation rocket we need to get there," Stephen Ubl, CEO of industry trade group PhRMA, said in a statement following the release of the list.
Zoom out: The medicines up for negotiation were chosen from a list of the 50 products with the highest spending in Medicare's prescription drug program, Part D.
- The selected drugs accounted for 20% of Part D prescription costs between June 1, 2022 and May 31, 2023, according to the Health and Human Services Department.
- Some of the highest-cost Medicare drugs were not eligible for this round of negotiations, either because they still have market exclusivity, they're the only option for a rare disease or another factor.
- The prices won't take effect before the 2024 elections, but Democrats are expected to tout the negotiations, along with other drug cost reforms in the IRA, as part of their campaign messaging.
What's next: The Centers for Medicare and Medicaid Services will submit price offers to the drug companies by Feb. 1, with negotiations continuing until next August.
- CMS will publish the drugs' final maximum fair prices by Sept. 1, 2024, and prices will go into effect in 2026.
What we're watching: Ongoing legal challenges could draw out or halt the negotiation process.
- Drugmakers and allied groups have already filed eight lawsuits against the Medicare drug negotiation process, and more lawsuits could follow Tuesday's announcement.
- President Biden and his health officials say they are committed to defending the law in court.
- "Let me be clear: I am not backing down. There is no reason why Americans should be forced to pay more than any developed nation for life-saving prescriptions just to pad Big Pharma's pockets," Biden said in a statement.
Editor's note: This story was updated with Biden's remarks.
