First Medicare drug price negotiations round nears end

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Good afternoon! The primary round of the Biden administration’s Medicare drug price negotiations is almost finished, with two major deadlines approaching. 

President Joe Biden’s signature Inflation Reduction Act gave Medicare the ability to directly hash out drug prices with manufacturers for the primary time within the federal program’s nearly six-decade history. That process goals to make expensive medications cheaper for older Americans, however the pharmaceutical industry argues that it’s a threat to their revenue, profits and drug innovation. 

The federal government and manufacturers have been in talks since February, when Medicare sent its initial price offer for every of the ten medications chosen almost a 12 months ago. That features diabetes treatments from Merck, AstraZeneca and Boehringer Ingelheim and blood thinners from Johnson & Johnson and Bristol Myers Squibb, amongst other drugs. 

The negotiation period officially ends next Thursday. Medicare will publish the ultimate agreed-upon prices for the medications by the start of September, though the precise timing remains to be unclear. 

Those prices will go into effect in 2026. 

Each the federal government and drugmakers have largely remained tight-lipped about what negotiations have been like. But corporations have said they’ve factored any impact from the value talks into their long-term financial outlooks. 

“We’ve got received the ultimate numbers from the federal government. We’re not disclosing that presently,” said Jennifer Taubert, J&J’s worldwide chairman of modern medicine during an earnings call last week. “While we are usually not in alignment with the [Inflation Reduction Act] and the price-setting process, those numbers have been included within the guidance that we provided last 12 months … that also looks excellent to us today.”

Meanwhile, lawsuits brought by Merck, Novartis and Novo Nordisk against the negotiations are awaiting decisions from district courts. Each case brings claims that overlap with suits from AstraZeneca, Boehringer Ingelheim, and Bristol Myers Squibb and J&J which were rejected in recent months. 

After this initial round of talks, Medicare can negotiate prices for an additional 15 drugs for 2027 and an extra 15 in 2028. The number rises to twenty negotiated medications a 12 months starting in 2029 and beyond.

Vice President Kamala Harris, the front-runner to interchange Biden because the Democratic candidate for president after he dropped out of the 2024 race Sunday, would likely attempt to expand the scope of negotiations if elected, experts told CNBC. 

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Epic Systems, Abridge and Mayo Clinic on Tuesday announced they’re constructing a latest AI-powered solution to assist automate among the note taking that nurses need to do. 

Like doctors, nurses are required to finish a mountain of administrative tasks like paperwork, and the workload contributes to high burnout across the health-care field. At Mayo Clinic, as an illustration, which provides care to greater than 1.3 million patients globally every year, documentation is one among the largest pain points for nurses, said Ryannon Frederick, chief nursing officer at Mayo Clinic. 

“At once in our current environment, they’re spending a big period of time on work that is required, but doesn’t necessarily use the total skill set that they carry to the table,” Frederick told CNBC in an interview. 

“We’ve got to search out ways to make the work easier for them in order that we’re using their skills, their expertise, their intelligence, within the places where it’s most needed for patients,” Frederick added.

Abridge, founded in 2018, originally developed an AI documentation tool for doctors that it has deployed across health systems like Sutter Health, Yale Recent Haven Health System, Emory Healthcare and others. When doctors meet with a patient, they’ll use Abridge to consensually record their conversations and routinely turn them into clinical notes and summaries.

In March, Abridge CEO Dr. Shiv Rao said the corporate is saving some physicians as much as three hours a day. The natural next step is to tailor the technology and convey those advantages to nurses. 

“We are saying that there is a public health emergency around clinician burnout and staffing shortages, but that public health emergency, I’d say, is nowhere more acute than on the nursing side,” Rao told CNBC in an interview. 

Abridge’s technology integrates directly with Epic, a health-care software vendor that houses the patient medical records for greater than 305 million people worldwide. Garrett Adams, vice chairman of R&D at Epic, said the businesses have been collaborating on the brand new nursing tool for the past 12 months through Epic’s “Workshop” program. Microsoft’s Nuance Communications, which offers a competing AI documentation tool, also participates in this system. 

Frederick said Mayo Clinic has seen some early prototypes of Abridge’s nursing tool and tested it in a simulation center, nevertheless it’s still early days. It is important to be sure that the answer actually solves problems for her staff, she said, so Mayo Clinic will proceed to check and evaluate it before rolling it out on a bigger scale.  

Abridge plans to bring its nursing documentation tool to other health-care organizations in the long run.

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