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Tuesday, August 29, 2023

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

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

“The Biden administration’s announcement was an important moment for Democrats, who have campaigned on a promise to lower the cost of prescription drugs.

An overhead image of pill bottles being filled on an assembly line. White bottles are filled with multicolored pills.
The medications on the list are taken by millions of older Americans and cost Medicare billions of dollars annually.Matt Rourke/Associated Press

The Biden administration on Tuesday announced the first 10 medicines that will be subject to price negotiations with Medicare, kicking off a landmark program that is expected to reduce the government’s drug spending but is being fought by the pharmaceutical industry in court.

The medications on the list are taken by millions of older Americans and cost Medicare billions of dollars annually. The drugs were selected by the Centers for Medicare & Medicaid Services through a process that prioritized medications that account for the highest Medicare spending, have been on the market for years and do not yet face competition from rivals.

Drugs Selected for Price Negotiations

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

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

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

4. Januvia, for Type 2 diabetes, from Merck

5. Farxiga, for chronic kidney disease, from AstraZeneca

6. Entresto, for heart failure, from Novartis

7. Enbrel, for arthritis and other autoimmune conditions, from Amgen

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

9. Stelara, for Crohn’s disease, from Johnson & Johnson

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

The final list had some overlap with what experts had anticipated. Its release was an important moment for Democrats, who have campaigned on a promise to lower the cost of prescription drugs. President Biden will mark the occasion with remarks at the White House on Tuesday afternoon — another sign that he intends to make lowering health care costs a theme of his 2024 re-election campaign.

Medicare gained the authority to negotiate the price of some prescription medicines when Congress passed the Inflation Reduction Act last year, a signature legislative achievement for the president. Tuesday’s announcement is a key step toward those negotiations, which will unfold over the coming months, with the new prices taking effect in 2026. Additional drugs will be selected for price negotiations in coming years.

The negotiation program is projected to save the government an estimated $98.5 billion over a decade. It is also expected to eventually reduce insurance premiums and out-of-pocket costs for many older Americans, though the magnitude of those savings remains to be seen.

Medicare already pays reduced prices for drugs on the list, reflecting rebates that are passed down by pharmacy benefit managers, the middlemen that negotiate discounts with manufacturers. But before passage of the Inflation Reduction Act, Medicare was explicitly barred from negotiating prices directly with manufacturers.

Republicans in Congress opposed authorizing Medicare to negotiate prices, criticizing the move as tantamount to imposing government price controls. Beyond Mr. Biden, other Democrats up for re-election next year have also sought to highlight the program as a major achievement.

Polling by KFF, a health policy research organization, has found broad, bipartisan public support for allowing Medicare to negotiate prices. In a survey late last year, 89 percent of Democrats and 77 percent of Republicans said they favored the plank of the Inflation Reduction Act that authorizes negotiations.

“There are very few issues in American politics that are popular no matter where you live or what your political party is,” said Leslie Dach, a longtime Democratic strategist and the chairman of Protect Our Care, a health care advocacy group.

But Mr. Biden and his fellow Democrats face the challenge of drawing attention to the negotiation program. In a KFF survey in July, only a quarter of Americans were aware of its existence.

Now that the list of drugs is public, their makers have until Oct. 1 to declare whether they will participate in negotiations with the government. Companies that decline to negotiate must either pay a large excise tax or withdraw all of their products from both Medicare and Medicaid, the federal-state program that provides health coverage to low-income people.

Six pharmaceutical manufacturers — Astellas PharmaAstraZenecaBoehringer IngelheimBristol Myers SquibbJohnson & Johnson and Merck — have taken the Biden administration to court in an attempt to block the Medicare negotiation program. The industry’s main trade group and the U.S. Chamber of Commercehave also filed suit.

The suits make a variety of constitutional claims, including that the requirement that drugmakers negotiate or pay a fine violates the Fifth Amendment’s prohibition on the taking of private property for public use without just compensation.

Sheryl Gay Stolberg is a Washington Correspondent covering health policy. In more than two decades at The Times, she has also covered the White House, Congress and national politics. Previously, at The Los Angeles Times, she shared in two Pulitzer Prizes won by that newspaper’s Metro staff. More about Sheryl Gay Stolberg

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