The U.S. Department of Health and Human Services (HHS) on Tuesday announced the first 10 drugs covered under Medicare Part D to be selected for the Medicare Drug Price Negotiation Program. Under the program, which was created by the Inflation Reduction Act, the federal government will be able to negotiate the price of selected drugs for the first time.
The 10 drugs and their total Part D gross covered prescription drug costs from June 2022 to May 2023 are:
- Eliquis ($16.5 billion)
- Jardiance ($7.1 billion)
- Xarelto ($6 billion)
- Januvia ($4.1 billion)
- Farxiga ($3.3 billion)
- Entresto ($2.9 billion)
- Enbrel ($2.8 billion)
- Imbruvica ($2.7 billion)
- Stelara ($2.6 billion)
- Fiasp ($2.6 billion)
These 10 drugs represented $50.5 billion in total Part D gross covered prescription drug costs (20% of total Part D gross covered prescription drug costs) between June 1, 2022, and May 31, 2023. In 2022, Medicare beneficiaries spent $3.4 billion in out-of-pocket costs for the 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. But thanks to the landmark Inflation Reduction Act, we are closer to reaching President Biden’s goal of increasing availability and lowering prescription drug costs for all Americans,” said HHS Secretary Xavier Becerra in a news release.
Prescription drug costs are significantly higher in the U.S. than in other countries: per capita prescribed medicine spending was $1,126 in the U.S. in 2019, versus the comparable country average of $552, according to KFF. Xarelto, for example, cost $531 per 30 pills in the U.S. as of April, compared to $111 in Canada, according to Statista.
The release of the 10 drugs comes at a time when six pharma companies and two industry groups have filed a total of eight lawsuits against the Medicare Drug Price Negotiation Program. The pharma companies are Merck, Bristol Myers Squibb, Astellas, Johnson & Johnson, Boehringer Ingelheim and AstraZeneca, while the industry groups are the Dayton Area Chamber of Commerce and the National Infusion Center Association.
“Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred,” Becerra added.
AARP, a nonprofit advocating for Americans aged 50 and older, came out in support of the list.
“AARP applauds CMS for taking this next critical step to bring down out-of-control prescription drug prices,” said Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer, in a statement. “For too long, big drug companies have fleeced our country and padded their profits by setting outrageous prices, all at the expense of American lives. The number one reason seniors skip or ration their prescriptions is because they can’t afford them. This must stop.
“Allowing Medicare to negotiate prices for these first 10 drugs will finally bring much needed access and relief to American families, particularly older adults,” LeaMond continued. “We cannot overstate how monumental this law is for older Americans’ financial stability and overall health.”
David Mitchell, a cancer patient and founder of advocacy organization Patients for Affordable Drugs Now, also applauded the release of the 10 drugs.
“I am one of millions of people in this country who take Eliquis (apixaban), a blood thinner that has a list price of almost $7,000 in the U.S. because its maker, Bristol-Myers Squibb, has blocked competition. In Canada, where there is a generic, the price is less than $1,700,” Mitchell said. “With negotiations, millions of patients will finally get a more affordable price for drugs like Eliquis.”
Others are not so supportive of the announcement, including We Work for Health, an organization focused on spurring innovation in the prescription drug space.
“Here’s what is possible. We could see the loss of as many as 1.1 million jobs throughout the biopharmaceutical industry and a decrease in U.S. competitiveness in the global ecosystem,” said Dan Leonard, executive director of the organization, in a statement. “We expect domestic drug competition and generic drug development to ultimately cost patients more money and decrease their access to the best care possible. Already-misaligned incentives will worsen while health insurance middlemen continue to enrich themselves. As history has demonstrated time and time again, any dollars ‘saved’ will not go toward strengthening the Medicare program but will be siphoned off and used to fund non-healthcare related endeavors. This list of real-life impacts goes on and on.”
Companies with a drug in the negotiation program must decide if they will participate by October 1. The negotiation period will then take place and end on August 1, 2024. CMS will publish the negotiated prices on September 1, 2024, and the prices will go into effect in 2026. CMS will progressively add additional drugs to the program.
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