Widely used diabetes, heart disease, autoimmune drugs for Medicare price negotiation

The first 10 prescription drugs the federal government will negotiate under a new federal law were revealed Tuesday, launching a process that could deliver drug discounts by 2026.

The batch of 10 medications include some of the most widely prescribed or expensive drugs older Americans use for conditions such as heart disease, diabetes and autoimmune conditions.

The Biden administration will negotiate prices for these nine drugs: Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica and Stelara. The other drug includes the insulin medications Fiasp and NovoLog, including versions named Fiasp FlexTouch, Fiasp PenFill, NovoLog FlexPen and NovoLog PenFill, the Centers for Medicare & Medicaid Services said Tuesday.

"For far too long, Americans have paid more for prescription drugs than any major economy," President Joe Biden said in a statement early Tuesday. "And while the pharmaceutical industry makes record profits, millions of Americans are forced to choose between paying for medications they need to live or paying for food, rent, and other basic necessities. Those days are ending."

Price changes for the first batch of 10 negotiated drugs won’t take effect until 2026. Over the next two years, another 30 drugs will be selected for negotiated prices beginning in 2027 and 2028.

Even as Big Pharma objects, Medicare's priciest drugs may get cheaper as feds start negotiations

Limits on which prescription drug prices can be negotiated

The 10 selected drugs accounted for about 20% of total spending for Medicare Part D prescription drugs over the past year, officials said. In all, those drugs cost Medicare and enrollees about $50.5 billion from June 1, 2022, through May 31 this year ? the period for which costs were evaluated.

Although Medicare picks up most of that tab, about 9 million enrollees spent $3.4 billion in out-of-pocket costs for those drugs ? a struggle for many seniors.

The federal government's new drug negotiating power comes from the Inflation Reduction Act, the sweeping climate and health legislation Congress passed last year.

The list did not include the top-selling rheumatoid arthritis drug Humira, which had a two-decade exclusive window before competing biosimilars launched this year.

Administrators followed provisions of the law and earlier guidance when selecting which drugs to negotiate, said Meena Seshamani, a Centers for Medicare & Medicaid Services deputy administrator and director of the Center for Medicare.

Retail drugs were selected only after they have been on the market for seven years without a competing generic version. Physician-administered "biologic" drugs must be on the market for 11 years before being subject to negotiation, Seshamani said.

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Some savings to come sooner than others

While consumers won't see discounts from negotiated prices until 2026, other provisions promise more immediate savings. In 2025, enrollees in Medicare's Part D drug plans will have their out-of-pocket expenses for prescriptions capped at $2,000 per year.

Consumer and senior advocates long have sought efforts to slow rising drug prices for brand-name prescriptions for Medicare enrollees and taxpayers. But drug companies and their industry allies have fiercely contested the process, filing eight lawsuits seeking to halt drug negotiations.

Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America, which represents pharmaceutical companies, blasted the negotiations as a "rushed process focused on short-term political gain rather than what is best for patients."

"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," Ubl said.

CMS Administrator Chiquita Brooks-LaSure told USA TODAY she hopes the drug companies will "want to come to the table" and negotiate despite the lawsuits. Her agency will bargain with drug manufacturers and publish prices next September for prices that will take effect Jan. 1, 2026.

"We want to pay them adequately," Brooks-LaSure said. "We just don't want to be a price taker where they just set whatever price they want to charge and Medicare has no ability to make sure that people are getting the best value for their dollar."

The federal health program for adults 65 and older and disabled people sets reimbursement amounts for medical care from doctors and hospitals, but until now, Medicare has been prohibited from negotiating drug prices under 2003 legislation that expanded Medicare’s prescription drug coverage.

The law also capped Medicare recipients' out-of-pocket insulin costs at $35 a dose beginning this year. Though that provision did not extend to Americans covered by private insurance plans, three major insulin makers said they would slash prices by 70% or more on their respective products.

Medicare wants to trim spending on expensive, widely used drugs

Analysts say that while the price negotiations will start with 10 drugs, it will represent big savings for Medicare. The drugs were targeted for overall cost to Medicare, because of either high list prices or use by a lot of enrollees.

"The goal of this program is really to lower Medicare spending on these drugs," said Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a nonpartisan health foundation.

Eliquis, prescribed to prevent or treat blood clots, was used by 3.7 million Medicare enrollees at a cost of nearly $16.5 billion last year. Drugmaker Bristol Myers Squibb disputed the amount Medicare spent, saying it "fails to take into consideration all rebates, discounts, and fees paid to Medicare and Part D plans," a spokesperson said.

Mariana Socal, an associate scientist at Johns Hopkins Bloomberg School of Public Health's department of health policy and management, said the negotiations should make drug pricing more transparent because Medicare will publish the negotiated prices.

"This will bring great relief to Medicare patients who pay high out-of-pocket costs for their drugs," Socal said. "In addition, the transparent prices will provide more information to empower patients outside of Medicare to demand lower prices as well."

Nick Fabrizio, a senior lecturer in health policy at Cornell University, said Democrats will likely highlight their efforts to lower drug costs. However, he said, it will take time to assess how the price negotiations will affect the drug industry.

“While we may see the impact that this has on lowering health care costs, we will also see whether prescribing habits change to other alternatives that may provide greater reimbursement and whether these price controls hamper research and development by the pharmaceutical industry."

Ken Alltucker is on X, formerly Twitter, at @kalltucker, or can be emailed at [email protected].

This article originally appeared on USA TODAY: Top diabetes, heart disease drugs for Medicare price negotiation