Merck & Co. Inc.’s Januvia brand medication, used to treat Type 2 diabetes.
Daniel Acker | Bloomberg | Getty Images
Medicare is poised to directly negotiate drug prices with the pharmaceutical industry this fall for the primary time in this system’s nearly six-decade history.
The Centers for Medicare and Medicaid Services will unveil, no later than Sept. 1, the list of 10 drugs that it’s targeting this 12 months, an agency spokesperson said.
Though it remains to be unclear which 10 drugs Medicare will select, several pharmaceutical firms have already revealed in court filings that they expect 4 of their blockbuster medications to be targeted.
Merck‘s lawyers said the corporate’s Type 2 diabetes drug Januvia will probably be on the list, with its blockbuster cancer immune therapy treatment Keytruda to develop into a goal in subsequent years.
Bristol-Myers Squibb and Johnson & Johnson, in separate filings, said their blood thinners Eliquis and Xarelto will probably be subject to the negotiations this 12 months. Abbvie said in its own filing that the corporate expects its blood cancer drug Imbruvica will even be a goal in the autumn.
These are the opposite six drugs that can likely be subject to negotiations this 12 months, based on an evaluation by the Journal of Managed Care and Specialty Pharmacy published in March:
- Jardiance, made by Boehringer Ingelheim, used to treat heart failure
- Enbrel, made by Amgen, used to treat rheumatoid arthritis
- Symbicort, made by AstraZeneca, used to treat asthma
- Ibrance, made by Pfizer, used to treat breast cancer
- Xtandi, made by Astellas Pharma, used to treat prostate cancer
- Breo Ellipta, made by GSK, used to administer pulmonary disease
Surge in list prices
The historic negotiations, established by the Inflation Reduction Act, are the cornerstone of the Biden administration’s efforts to slash drug costs.
The list price of Medicare’s top 25 drugs has greater than tripled on average since they first entered the U.S. market, greatly exceeding the speed of inflation, based on an evaluation published by AARP on Thursday.
AARP is a strong lobbying group that advocates on behalf of individuals ages 50 and older. The group strongly supports the Medicare drug-price negotiation program.
The list price of Januvia has surged 275% since 2006, based on the AARP. Eliquis has jumped 124% since 2012. Xarelto has increased 168% since 2011, and Imbruvica has risen 108% since 2013.
These price hikes were all significantly higher than the corresponding rate of inflation, which ranged from 31% within the case of Eliquis to 50% within the case of Januvia, based on AARP.
Merck booked $2.8 billion in revenue from Januvia in 2022. Bristol Myers Squibb generated $11.8 billion in sales from Eliquis last 12 months. Johnson & Johnson reported $2.47 billion in revenue from Xarelto. And Abbvie posted $4.6 billion in sales of Imbruvica.
People enrolled in Medicare take a mean of 4 to 5 prescribed drugs a month and increasingly face out-of-pocket costs that many struggle to afford, based on AARP.
“Increasingly people face cost-sharing that’s directly affected by drug price increases,” Leigh Purvis, who analyzes health-care costs for AARP, told reporters on a call Thursday.
One in 5 older adults deal with high drug prices by not filling a prescription or by skipping a dose to get monetary savings, based on a study published in Jama Network Open in May.
Industry goals to dam negotiations
The pharmaceutical industry has filed a torrent of lawsuits to dam the negotiations, arguing that this system is an unconstitutional seizure of their property. Drugmakers view the negotiations as a significant threat to their profits and argue it would jeopardize future drug development.
Legal experts say the businesses are spreading their lawsuits across the country to extend the probabilities that one in every of the cases will ultimately find yourself before the Supreme Court.
While the list of 10 drugs will probably be published by September, there’s growing uncertainty over whether the negotiations will move forward on schedule.
The U.S. Chamber of Commerce has asked a federal judge in Ohio to dam this system before Oct. 1. Kelly Bagby, vp of AARP’s legal team, said the chamber faces a heavy lift to persuade the judge that its interests outweigh those of Medicare beneficiaries.
“It is so obvious that the pharmaceutical firms should not the victims that they’re painting themselves to be,” Bagby said on Thursday’s call.
“We are attempting to guard the integrity of the Medicare program for everyone,” she said. “But we’re also attempting to allow for older people and vulnerable people to not need to make horrible selections — do I get to pay my rent today or do I get to take my lifesaving drugs.”
After the list of medicine is published, the manufacturers need to sign agreements to take part in the negotiations by Oct. 1. CMS will then make an initial price offer to the businesses in February 2024. The manufacturers then have a month to make a counteroffer.
The negotiations end in August 2024, with prices published the next month. The reduced prices go into effect in January 2026.
