A pharmacist holds a bottle of the drug Eliquis, made by Pfizer Pharmaceuticals, at a pharmacy in Provo, Utah, January 9, 2020.
George Frey | Reuters
All drugmakers of the primary 10 medicines chosen for Medicare drug price negotiations have agreed to take part in the talks, even after a lot of them sued to halt the method last month.
The businesses confirmed their participation in separate statements to CNBC. The Centers for Medicare & Medicaid Services didn’t immediately respond to a request to confirm that each one drugmakers agreed to the talks.
President Joe Biden’s Inflation Reduction Act, which passed last 12 months, empowered Medicare to negotiate drug prices for the primary time in this system’s six-decade history. The lengthy negotiation process won’t end until August 2024, with reduced prices going into effect in January 2026.
Sunday was the deadline for all 10 pharmaceutical corporations to sign an agreement to engage within the negotiations, which aim to make costly medications cheaper for older Americans.
Monday, meanwhile, is the deadline for those corporations to submit economic and market information on their drugs, including research and development costs and sales and revenue data.
Listed below are the ten drugs and the businesses that manufacture them:
- Eliquis, made by Bristol Myers Squibb, is used to prevent blood clotting, to reduce the chance of stroke.
- Jardiance, made by Boehringer Ingelheim, is used to lower blood sugar for individuals with Type 2 diabetes.
- Xarelto, made by Johnson & Johnson, is used to prevent blood clotting, to reduce the chance of stroke.
- Januvia, made by Merck, is used to lower blood sugar for individuals with Type 2 diabetes.
- Farxiga, made by AstraZeneca, is used to treat Type 2 diabetes.
- Entresto, made by Novartis, is used to treat certain forms of heart failure.
- Enbrel, made by Amgen, is used to treat rheumatoid arthritis.
- Imbruvica, made by AbbVie, is used to treat various kinds of blood cancers.
- Stelara, made by J&J subsidiary Janssen, is used to treat Crohn’s disease.
- Fiasp and NovoLog, made by Novo Nordisk, are insulins.
Lots of the drugmakers contend that that they had no real selection but to take part in the negotiations, specifically due to the penalties they might face in the event that they select not to.
If drugmakers decline to engage within the negotiations, they may very well be forced to pay an excise tax of up to 95% of their medication’s U.S. sales or to pull all of their products from the Medicare and Medicaid markets, according to CMS.
“We now have no selection apart from to sign the ‘agreement.’ If we didn’t sign, we would be required to pay impossibly high penalties unless we withdraw all of our medicines from Medicare and Medicaid. That just isn’t an actual selection,” a spokesperson for Bristol Myers Squibb told CNBC ahead of the Sunday deadline.
That statement echoes the arguments outlined in no less than nine separate lawsuits drugmakers filed against the Biden administration in recent months looking for to declare the negotiations unconstitutional.
The pharmaceutical industry also argues that the method will threaten revenue growth, profits and drug innovation.
Nonetheless, analysts expect minimal financial losses for corporations, no less than initially, since many of the drugs chosen already face upcoming patent expirations that can likely weigh on revenue.
What happens next?
This fall, CMS will host one meeting with all 10 corporations so that they can provide context for the info they submitted by Monday.
CMS will even host listening sessions with consumer and patient organizations to obtain information the agency can use to develop its initial price offers for the chosen drugs.
CMS will then make an initial price offer to manufacturers in February, and the businesses have a month to accept or make a counteroffer.
The negotiations will end in August, with agreed-upon prices published on Sept. 1, 2024. The reduced prices won’t go into effect until Jan. 1, 2026.
After the initial round of talks, CMS can negotiate prices for one more 15 drugs for 2027 and an extra 15 in 2028. The number rises to 20 negotiated medications a 12 months starting in 2029 and beyond.
CMS will only select Medicare Part D drugs for the medicines covered by the primary two years of negotiations. It’s going to add more specialized drugs covered by Medicare Part B, that are typically administered by doctors, in 2028.
The drug price talks are expected to save Medicare an estimated $98.5 billion over a decade, according to the Congressional Budget Office.
The negotiations are also anticipated to lower your expenses for people enrolled in Medicare, who take a mean of 4 to five prescribed drugs a month and increasingly face out-of-pocket costs that many struggle to afford.