The provision, signed into law by President Biden, will significantly lower out-of pocket drug costs for many of the over 1.1 million Arizona seniors enrolled in Medicare Part D coverage.
The Biden administration announced Tuesday that all 10 drug companies whose medicines were selected for Medicare price negotiations in August have agreed to participate in negotiations.
Now, these drugmakers will negotiate directly with the Centers for Medicare and Medicaid Services (CMS) to lower the cost of 10 commonly-used drugs, thanks to a provision in Biden’s Inflation Reduction Act (IRA), which became law last year.
The provision will significantly lower out-of pocket drug costs for many of the over 1.1 million Arizona seniors enrolled in Medicare Part D coverage.
“For decades, drug companies in America made record profits while big pharma worked to block Medicare from being able to negotiate lower drug prices for seniors. In fact, Americans now pay two to three times more than people in other countries for the exact same prescription drug made by the exact same company,” Biden said in an online video from the Oval Office. “So, my administration finally took a step to change that.”
The companies participating in the negotiations are:
The Congressional Budget Office reports that the negotiation provision will save taxpayers $160 billion by reducing how much Medicare pays for drugs through negotiation and inflation rebates.
These drugmakers participating in negotiations is a major milestone in Democrats’ push to lower drug prices by taking advantage of the federal government’s purchasing power.
The drugs include the blood thinners Eliquis and Xarelto, as well as the diabetes drugs Jardiance, Januvia, and Farxiga.
The other drugs are the heart failure treatment Entresto, the rheumatoid arthritis drug Enbrel, the blood cancer treatment Imbruvica, the anti-inflammatory medicine Stelara, and Novo Nordisk’s suite of insulins, which go by the names Fiasp and NovoLog.
According to CMS, these drugs were chosen for price negotiations because they accounted for more than $50 billion in Medicare prescription drug costs between June 1, 2022 and May 31, 2023, making them some of the most costly to the Medicare program.
Health care advocates, such as Patients for Affordable Drugs Now, lauded Tuesday’s news.
“On behalf of patients across the country, we are very pleased to see all of the drug companies manufacturing the 10 selected drugs have agreed to enter negotiations with Medicare,” Merith Basey, executive director of Patients For Affordable Drugs Now said in a statement. “People in the United States overwhelmingly support this law.”
Even with Tuesday’s announcement, the process to lower the prices of these drugs could still be complicated by lawsuits from drugmakers seeking to block the Medicare negotiation measure.
But the Biden administration is moving forward, confident they’re on strong legal footing. CMS plans to meet with drugmakers this fall, and government officials are set to hold patient-focused listening sessions. By Feb. 2024, the government will make its offer on a maximum fair price for each drug, and then drugmakers will be given time to respond.
New prices of these 10 drugs are not yet known, and won’t go into effect until 2026.
Another 15 drugs will be selected for negotiation and see their prices decrease in 2027, with 15 more following in 2028. Then, 20 more will be selected in 2029 and each year afterwards.
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