Under the 2022 Inflation Reduction Act, Congress gave the federal government the power to negotiate prices for certain high-cost drugs under Medicare. The list of drugs selected by the Centers for Medicare & Medicaid Services will grow over time.
For the participating drug companies, negotiations will take place this year and 2024, and any negotiated prices will become effective beginning in 2026, HHS said. Medicare enrollees taking the 10 drugs covered under Part D selected for negotiation paid a total of $3.4 billion in out-of-pocket costs in 2022 for these drugs.
“For far too long, pharmaceutical companies have made record profits while American families were saddled with record prices and unable to afford life-saving prescription drugs,” said HHS Secretary Xavier Becerra. “Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred.”
Imbruvica is a cancer drug used to treat adults with chronic lymphocytic leukemia, small lymphocytic lymphoma, or Waldenström’s macroglobulinemia, which are cancers involving white blood cells.
The Dayton Area Chamber of Commerce and several other U.S. chambers joined a lawsuit in June against HHS challenging the drug price negotiations. AbbVie is a member of the Dayton chamber.
Imbruvica was one of the top 10 gross annual Part D expenditures for plan year 2021, according to the lawsuit, which cites CMS data. The government spent $3.15 billion on the drug in 2021, accord to CMS data. The average retail price for Imbruvica is approximately $16,390, according to GoodRx.
If selected to be part of the drug price controls program, AbbVie would have to sell Imbruvica at “unreasonably low” prices lower than the current market prices, the lawsuit says. AbbVie also would have to disclose sensitive proprietary information during the negotiation process.
The chamber and AbbVie declined to comment for this story.
The full list of drugs selected for the first round of negotiations includes Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and also Fiasp, NovoLog, and associated products.
These drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20%, of total Part D gross covered prescription drug costs between June 1, 2022, and May 31, 2023, according to CMS.
CMS will publish any agreed-upon negotiated prices for the selected drugs by Sept. 1, 2024, and those prices will come into effect starting Jan. 1, 2026. In future years, CMS will select for negotiation up to 15 more drugs covered under Part D for 2027; up to 15 more drugs for 2028, including drugs covered under Part B and Part D; and up to 20 more drugs for each year after that, as outlined in the Inflation Reduction Act.
10 drugs targeted for Medicare price negotiations
*Eliquis -- Used to prevent blood clotting, to reduce the risk of stroke.
*Jardiance -- Used to lower blood sugar for people with Type 2 diabetes.
*Xarelto -- Used to prevent blood clotting, to reduce the risk of stroke.
*Januvia -- Used to lower blood sugar for people with Type 2 diabetes.
*Farxiga -- Used to treat Type 2 diabetes.
*Entresto -- Used to treat certain types of heart failure.
*Enbrel -- Used to treat rheumatoid arthritis.
*Imbruvica -- Used to treat different types of blood cancers.
*Stelara -- Used to treat Crohn’s disease.
*Fiasp and NovoLog -- Insulins used to treat diabetes.
Sources: AP, CNBC
About the Author
