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Drug Costs

Biden Administration Releases 10 Drugs for Price Negotiation

By Jonathan Springston, Editor, Relias Media

The White House announced this week the first 10 drugs covered under Medicare Part D that will be up for price negotiation.

The list includes commercially available medications for heart failure, blood clots, diabetes, arthritis, Crohn’s disease, and more. The Biden administration reported these drugs account for more than $50 billion in total Medicare Part D gross covered prescription drug costs (about 20% of all the gross covered costs). In 2022, Medicare patients paid $3.4 billion out of pocket for these 10 drugs, an average of about $6,500 per person.

Price negotiations will start this year and continue into 2024. The Centers for Medicare & Medicaid Services (CMS) plans to publish any agreed-upon negotiated prices by Sept. 1, 2024. The effective date of those prices will be Jan. 1, 2026.

These negotiations are possible under the terms of the Inflation Reduction Act (IRA) of 2022. Under the authority of the IRA, CMS will select as many as 15 more medications for negotiation in 2027, up to 15 more for 2028, and up to 20 more for each subsequent year.

The National Council on Aging (NCOA), a group that advocates for older patients, praised this week’s news. “Lower prices are a matter of equity,” said NCOA President and CEO Ramsey Alwin. “In a country as rich as ours, every person should have access to affordable healthcare. Allowing the government to negotiate on consumers’ behalf is a very welcome step in that direction.”

The American College of Physicians (ACP) said it is “encouraged” about the negotiations. “ACP is particularly glad that the list of prescription drugs that were selected includes so many drugs for complex chronic conditions that internal medicine physicians treat. Any treatment can only be as effective as our patients’ ability to access it,” said Darilyn V. Moyer, MD, MACP, FRCP, FIDSA, FAMWA, FEFIM, executive vice president and CEO of ACP. “Prescription drug costs can be a significant barrier, especially for our patients who suffer from multiple, complex chronic conditions. We call on pharmaceutical manufacturers to engage with Medicare in negotiating prices.”

These negotiations will not be easy. The Pharmaceutical Research and Manufacturers of America (PhRMA) called this “a rushed process focused on short-term political gain rather than what is best for patients” and argued many of these 10 drugs “already have significant rebates and discounts due to the robust private market negotiation that occurs in the Part D program today.”

“Giving a single government agency the power to arbitrarily set the price of medicines with little accountability, oversight, or input from patients and their doctors will have significant negative consequences long after this administration is gone,” said PhRMA President and CEO Stephen J. Ubl. “We will continue to fight for solutions that lower costs for patients at the pharmacy counter, address abusive practices by insurers and [pharmacy benefit managers], and mitigate the harm this law may have for future generations.”

In June, PhRMA filed a lawsuit in the U.S. District Court for the Western District of Texas to stop this process, calling it unconstitutional. In July, the U.S. Chamber of Commerce filed its own suit in the U.S. District Court for the Southern District of Ohio.

For more on this and related subjects, be sure to read the latest issues of Hospital Case Management and Medical Ethics Advisor, along with the “Pharmacology Update” feature that runs in each edition of Internal Medicine Alert.