Thursday, August 15, 2024

U.S. Announces Prices for First Drugs Picked for Medicare Negotiations (New York Times)

REMARKABLE VICTORY FOR THE AMERICAN PEOPLE.  CELEBRATE DEMOCRACY. 

NOT ONE (1) Republican in Congress, either House or Senate, supported this bill. 

It's almost as if Dull Republican Congresscritters think they exist to protect Big Pharma.  One longtime Big Pharma executive is running for St. Johns County Commission Seat 5, (ANN TAYLOR), perhaps the most dour and unfriendly candidate in 2024.  From The New York Times: 

U.S. Announces Prices for First Drugs Picked for Medicare Negotiations

The Biden administration said it would have saved $6 billion had the new prices been in effect last year.

A syringe with the word Enbrel on it is held in two hands.
A patient with rheumatoid arthritis holding an injection of Enbrel, one of several medications whose price has been negotiated between Medicare and pharmaceutical companies.Credit...Audra Melton for The New York Times

Noah Weiland and 

Noah Weiland covers federal health policy, and Rebecca Robbins covers the pharmaceutical industry.

The Biden administration on Thursday announced the results of landmark price negotiations between Medicare and the pharmaceutical companies over the prices of 10 costly or common medications taken by millions of older Americans.

Had the new prices been in effect last year, Medicare would have saved $6 billion, administration officials said.

The prices of the drugs, which include widely used blood thinners and arthritis medications, will take effect in 2026. They represent the first time that the federal government has directly negotiated with drugmakers on behalf of Medicare beneficiaries, and will reshape the federal government’s role in a program that covers tens of millions of older and disabled Americans.

“It’s a relief for the millions of seniors that take these drugs to treat everything from heart failure, blood clots, diabetes, arthritis, Crohn’s disease and more,” President Biden said in a statement. “And it’s a relief for American taxpayers.”

It is impossible to tell how much the new prices will save Medicare for each individual drug subject to negotiations. The federal government does not disclose the net prices it pays for medications, which take into account the billions of dollars in discounts the program receives.

Medicare’s Part D program covers most of the costs of prescription drugs that seniors take at home. Approximately nine million Part D beneficiaries took at least one of the first 10 medications subject to negotiations in 2022, according to federal estimates. Some will see direct savings at the pharmacy counter as a result of the negotiation program.

The prices the Biden administration announced were made possible by the Inflation Reduction Act, a climate, health and tax bill signed by Mr. Biden in 2022 that granted the health and human services secretary the authority to negotiate on behalf of Medicare.

The law delivered more immediate benefits to the program’s beneficiaries, including a $35 monthly cap on out-of-pocket costs for insulin, and a $2,000 annual cap on patient costs for drugs taken at home. The $2,000 limit will go into effect next year.

The selected drugs account for some of the highest Medicare spending, have been on the market for years and do not face competition. Medicare officials are not required to publish explanations of how the federal government arrived at the negotiated prices until March.

The number of drugs negotiated by the federal government is set to increase in the coming years. President Biden has called forMedicare to negotiate the prices of 500 drugs over the next decade.


Prices are the maximum Medicare Part D plans and the patient will pay for a one-month supply.

1. Eliquis, for preventing strokes and blood clots, from Bristol Myers Squibb and Pfizer, $231

2. Jardiance, for diabetes and heart failure, from Boehringer Ingelheim and Eli Lilly, $197

3. Xarelto, for preventing strokes and blood clots, from Johnson & Johnson, $197

4. Januvia, for diabetes, from Merck, $113

5. Farxiga, for diabetes, heart failure and chronic kidney disease, from AstraZeneca $178

6. Entresto, for heart failure, from Novartis, $295

7. Enbrel, for autoimmune conditions, from Amgen, $2,355

8. Imbruvica, for blood cancers, from AbbVie and Johnson & Johnson, $9,319

9. Stelara, for autoimmune conditions, from Johnson & Johnson, $4,695

10. Fiasp and NovoLog insulin products, for diabetes, from Novo Nordisk, $119


Mr. Biden and Vice President Kamala Harris are set to speak later Thursday at an event in Maryland celebrating the Medicare announcement, a sign of the issue’s importance to Mr. Biden’s legacy and Ms. Harris’s presidential hopes. At a series of campaign events last week, Ms. Harris said that efforts to “take on Big Pharma” would be among her first priorities as president.

In his statement Thursday, Mr. Biden noted that Ms. Harris had cast the tiebreaking vote for the legislation that delivered the drug price negotiation program.

The new prices could be especially important in appeals to older voters, who make up roughly 90 percent of the more than 60 million Medicare recipients. More than half of registered voters 65 years and older in the battleground states of Michigan, Wisconsin and Pennsylvania said in a New York Times/Siena College poll this month that they supported Ms. Harris’s candidacy, a potentially decisive group in an election with slim vote margins.

Still, only around half of Americans 65 and older surveyed in late April and early May were aware of the drug price negotiation program, according to KFF, the nonprofit health policy research group that carried out the survey.

Negotiations over drug prices are not new for Medicare.

It relies on hundreds of plans run by private insurers that administer the program. Part D plans hire middlemen known as pharmacy benefit managers, or P.B.M.s, to negotiate with manufacturers to secure lower prices for the government, by extracting discounts off an initial sticker price.

The result is that Medicare, like employers in the private market, already pays less than the sticker prices for the medications subject to negotiation. In 2021, those discounts ranged from 10 to 67 percent of the initial prices, according to an estimate by academic health economists. The new prices announced Thursday represent discounts from the 2023 initial prices ranging from 38 percent, for the cancer drug Imbruvica, to 79 percent, for the diabetes drug Januvia.

But the new negotiation program goes further in creating more leverage for Medicare by empowering the government to negotiate prices directly with manufacturers on behalf of all beneficiaries. P.B.M.s hired by Part D plans might still extract additional discounts on the drugs subject to negotiations, but experts say they are unlikely to be large.

The negotiations have faced a legal onslaught from the drugmakers, who have argued that the program is unconstitutional and will stifle innovation and harm patients by discouraging the development of new drugs.

The Congressional Budget Office has estimated that the Inflation Reduction Act would lead to only 13 fewer new drugs coming to market in the next 30 years.

The lawsuits, most of which are still moving through the courts, have had little success so far. Last week a federal judge tossed out a lawsuit filed by the Chamber of Commerce on behalf of AbbVie, a member organization and the maker of Imbruvica, a cancer drug selected for Medicare price negotiations.

In a statement, Stephen J. Ubl, the chief executive of the Pharmaceutical Research and Manufacturers of America, the drug industry’s main lobbying group, said the negotiation program amounted to a “price-setting scheme to drive political headlines.”

“But patients will be disappointed when they find out what it means for them,” he said. “There are no assurances patients will see lower out-of-pocket costs, because the law did nothing to rein in abuses by insurance companies and P.B.M.s who ultimately decide what medicines are covered and what patients pay at the pharmacy.”

The pharmaceutical industry fears that the Medicare negotiation program will lead to lower prices in the private market. With Medicare’s lower prices now public, P.B.M.s negotiating on behalf of the privately insured will have greater leverage to demand deeper discounts from manufacturers.

Health policy experts have said that the Inflation Reduction Act’s changes to Medicare’s Part D, including its cap on out-of-pocket drug costs, put significant strain on health plans in the program, increasing insurance premiums and potentially causing some plans to withdraw from Medicare. Savings from the Medicare negotiation program may mean that premiums rise by less than they otherwise would have.

The Biden administration has proposed giving insurers an extra $15 each month per member as a way to help ease the effects of the likely premium increases.

Medicare’s new influence on drug prices could be weakened or reversed if former President Donald J. Trump wins the White House in November, particularly with full Republican control of Congress. The authors of Project 2025, a Heritage Foundation-sponsored playbook for a future Republican administration written in part by former Trump administration officials, argued that the drug price negotiation program amounted to “price controls” that would “limit access to medications and reduce patient access to new medication.”

“This ‘negotiation’ program should be repealed, and reforms in Part D that will have meaningful impact for seniors should be pursued,” they wrote.

The prices published Thursday represent the maximum that Medicare Part D plans and the patient will pay at the pharmacy counter for a one-month supply. Medicare shoulders most of the cost and the patient typically covers a portion.

Noah Weiland writes about health care for The Times. More about Noah Weiland

Rebecca Robbins is a reporter covering the pharmaceutical industry. She has been reporting on health and medicine since 2015. More about Rebecca Robbins

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