In a milestone for government efforts to reduce the cost of prescription medications, the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) have made their initial offers to pharmaceutical manufacturers on newly negotiable prices for 10 specific prescription drugs.
Details of the offer were not released and aren’t expected to be made public until a deal between the government and drug companies is reached sometime this fall, though analysts cited by Reuters expect steep cuts up to 60 percent.
The new Medicare Drug Price Negotiation Program was enacted as a part of the Inflation Reduction Act. Among the first 10 drugs to be renegotiated are the blood thinners Eliquis (Bristol Myers Squibb/Pfizer) and Xarelto (Johnson & Johnson), along with the diabetes drug Januvia (Merck & Co).
All companies behind the selected drugs agreed to participate in negotiations, which are slated to end by Aug. 1. If new maximum fair pricing is agreed upon, those new prices would take effect in Medicare plans beginning in 2026.
“Because of President Biden’s Inflation Reduction Act, in 2024, people with Medicare prescription drug coverage who have very high drug costs will have their costs capped for the first time ever,” said CMS Administrator Chiquita Brooks-LaSure, in a statement.
“I am confident that this process will lead to lower prices, putting an end to exorbitant price gouging by pharmaceutical companies,” added HHS Secretary Xavier Becerra.
While the companies behind the vanguard drugs are playing ball with negotiators, the industry has already pushed back in the form of lawsuits filed by both individual companies and interest groups, including a June 2023 filing led by the Pharmaceutical Research and Manufacturers of America (PhRMA) against HHS.
“This continues to be an exercise to win political points on the campaign trail rather than do what’s in the best interest of patients,” PhRMA’s Senior VP of Public Affairs Alex Schriver said in a statement following HHS’ initial offer. “Government bureaucrats are operating behind closed doors to set medicine prices without disclosing for months how they arrived at the price. ... This lack of transparency and unchecked authority will have lasting consequences for patients long after this administration is gone.”
In conjunction with the negotiation efforts, HHS has introduced LowerDrugCosts.gov, a new resource hub designed to assist Medicare beneficiaries in accessing more affordable medications. HHS supported the need for these initiatives by citing new research showing the U.S. pays nearly three times more for drugs overall, including both brand name and generics, compared with other OECD countries.
Evan joined TriMed in 2011, writing primarily for Health Imaging. Prior to diving into medical journalism, Evan worked for the Nine Network of Public Media in St. Louis. He also has worked in public relations and education. Evan studied journalism at the University of Missouri, with an emphasis on broadcast media.