The first 10 medications that the U.S. Department of Health and Human Services are negotiating prices for under Medicare this year. Chart by HHS
The Biden administration named the first 10 prescription drugs on Tuesday that will undergo Medicare price negotiations starting this year. This story is only the first part of what will be a continuing legal and political saga in the coming years.
One result of the historic announcement is that the government and taxpayers are expected to save $98.5 billion over the next decade, as Sheryl Gay Stolberg and Rebecca Robbins reported for The New York Times. For at least 30 years, federal officials have tried and failed to control rising drug prices, as we reported earlier this month.
The 10 drugs were chosen from among the 50 most costly medications in Medicare’s pharmacy drug benefit program, known as Medicare Part D, according to Rachel Cohrs and Matthew Herper at STAT. Tom Murphy, Amanda Seitz and Chris Megerian listed all of the drugs for The Associated Press and their common uses.
Here are the selected drugs:
- Eliquis (apixaban), a blood thinner.
- Xarelto (rivaroxaban), a blood thinner.
- Imbruvica (ibrutinib), for blood cancer.
- Farxiga (dapagliflozin), for diabetes.
- Jardiance (empagliflozin), for diabetes.
- Januvia (sitagliptin), for diabetes.
- Entresto (no generic available), for patients with heart failure.
- Enbrel (etanercept), for those with rheumatoid arthritis, psoriasis and psoriatic arthritis.
- Stelara (ustekinumab), for patients with psoriasis and psoriatic arthritis.
- Fiasp and its related products (Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, and NovoLog PenFill), for patients with Type 1 diabetes.
The U.S. Department of Health and Human Services chose the 10 medications based on spending data the agency collected over 12 months (June 1 of last year through May 31 of this year). For those 10 drugs, Medicare enrollees with Part D paid $3.4 billion in out-of-pocket costs last year, the agency noted, and the government (on behalf of taxpayers) paid $50.5 billion for these same 10 medications. That $50.5 billion was about 20% of total Medicare spending under Part D for all covered prescription drugs over the 12 months under study.
Next steps
After starting this year, drug-price negotiations will extend into 2024, and any negotiated prices will become effective in 2026, HHS said. Almost one year from now (on Sept. 1, 2024), CMS will publish the agreed-upon negotiated prices for the 10 selected drugs.
After that, the Inflation Reduction Act calls for the federal Centers for Medicare and Medicaid Services to identify as many as 15 more drugs for negotiation under Part D and set prices for those medications in 2027. Then, CMS will name 15 other drugs for 2028 (including drugs covered under Part B and Part D) and as many as 20 more drugs for each year after that, according to the HHS press release. Drugs covered under Part B are often given in a physician’s office or in a hospital outpatient setting.
The challenges ahead
Any story involving Medicare and drug prices has a political angle and often a legal challenge as well, as Jonathan Cohn explained in the Huffington Post. Last year, Democrats in the U.S. House and Senate passed the Inflation Reduction Act without any Republican support. Many of those same Republicans are now taking credit for the law.
“Whether the new scheme remains in place depends on whether its critics, including leaders of the drug industry and the Republican Party, manage to weaken, block or repeal it through new legislation and lawsuits,” Cohn wrote.
The international angle
Cohn also noted that the United States has fallen behind other large industrialized nations in regulating drug prices. The governments of France, Germany, Japan and other economically advanced nations have long used negotiations or regulation to keep drug prices down, he wrote. The result: those governments and their citizens pay much less than their American counterparts, he added.
Still to come
For a little-known but important angle on this story, read how Stacie Dusetzina, Ph.D., a researcher in the Department of Health Policy at the Vanderbilt University School of Medicine, explained the next steps on X (formerly Twitter). Medicare will use the savings it gets from drug-price negotiations to expand Part D when it’s redesigned in 2025, she wrote.
Also, she added, the Inflation Reduction Act will set a $2,000 out-of-pocket cap for Medicare members in the Part D program in 2025. Even patients who take lower-priced drugs will benefit from more consistent prices from one prescription purchase to the next, instead of seeing prices rise frequently with every fill, she noted.
