U.S. Announces First Drugs Picked for Medicare Price Negotiations
On August 23, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced the first 10 drugs covered under Medicare Part D selected for price negotiation. This means, for the first time, Medicare will be able to negotiate prices directly with drug companies, lowering prices on some of the costliest prescription drugs.
The medications — which treat diabetes, cancer and other conditions — are taken by millions of older Americans and cost Medicare billions of dollars annually. The CMS selected the drugs through a process that prioritized those that account for the highest Medicare spending, have been on the market for years and do not yet face competition from rivals.
Thanks to provisions of the Inflation Reduction Act, additional medications will be selected for price negotiations in the years ahead. Over the next four years, Medicare will negotiate prices for up to 60 drugs covered under Medicare Part D and Part B, and up to an additional 20 drugs every year after that.
The negotiations with participating drug companies will occur in 2023 and 2024, and any negotiated prices will become effective beginning in 2026. Medicare enrollees taking the 10 drugs selected for negotiation paid a total of $3.4 billion in out-of-pocket costs in 2022 for them. The selected drug list for the first round of negotiation is:
DRUG NAME
COMMONLY TREATED CONDITIONS
Eliquis
Prevention and treatment of blood clots
Jardiance
Diabetes; heart failure
Xarelto
Prevention and treatment of blood clots; reduction of risk for patients with coronary or peripheral artery disease
Januvia
Diabetes
Farxiga
Diabetes; heart failure; chronic kidney disease
Entresto
Heart failure
Enbrel
Rheumatoid arthritis; psoriasis; psoriatic arthritis
Imbruvica
Blood cancers
Stelara
Psoriasis; psoriatic arthritis; Crohn’s disease; ulcerative colitis
Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill
Diabetes
These selected drugs accounted for $50.5 billion, or about 20%, of total Medicare Part D gross covered prescription drug costs between June 1, 2022 and May 31, 2023. HHS Secretary Xavier Becerra remarked in a statement:
“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. 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.”
For more information:
View a fact sheet from the Office of the Assistant Secretary for Planning and Evaluation (ASPE).
View a CMS fact sheet on the drugs selected for the Medicare Drug Price Negotiation Program.
View details on the Medicare Drug Price Negotiation Program.
Pacific Federal is a Zenith American company and subsidiary of Harbour Benefit Holdings, Inc.
