CMS Announces First 10 Drugs To Undergo Price Negotiations Under Inflation Reduction Act

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Any new prices established after negotiations will be effective on January 1, 2026.

The Centers for Medicare & Medicaid Services (CMS) have announced the first 10 prescription drugs chosen for price negotiations under the Inflation Reduction Act.

The 10 selected drugs are apixaban (Eliquis; Bristol Myers Squibb and Pfizer), empagliflozin (Jardiance; Boehringer Ingelheim and Lilly), rivaroxaban (Xarelto; Janssen), sitagliptin (Januvia; Merck), dapagliflozin (Farxiga; AstraZeneca), sacubitril/valsartan (Entresto; Novartis), etanercept (Enbrel; Amgen), ibrutinib (Imbruvica; Pharmacyclics and Jansen), ustekinumab (Stelara; Janssen), and insulin aspart injection (Fiasp; Novo Nordisk); Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill.1

Pills and capsules in a bottle on US dollars bills. Concept of health care, pharmaceutical business, drug prices, pharmacy, medicine and economics

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In August of 2022, President Biden signed into law the Inflation Reduction Act of 2022. The Act ensured advances to Medicare by growing benefits, lowering drug costs, and improving the viability of the Medicare program for future individuals.1

In the following year, on March 15, 2023, CMS initiated the Medicare Drug Price Negotiation Program. This program allows Medicare to directly negotiate the prices of high-cost single source drugs without generic or biosimilar competition.1 This involves Medicare interacting directly with drug companies when negotiating lower costs and reducing the financial costs of drug spending by the federal government.

The negotiations are the result of debates that began in 2021 between lawmakers to grant the Secretary of Health and Human Services (HHS) the availability to negotiate prices for drug coverage under Medicare Part D and Part B.2

CMS followed up with the initial guidance of the program and created a revised guidance based on issues that were reported. The revisions included requirements for the Medicare Drug Price Negotiation Program that would affect the change of prices in 2026.1,2

Fast forward to today, when the first round of negotiation drugs was selected by the HSS to be covered under Medicare Part D through the CMS. If the 10 selected drugs are granted a different price, it will be effective on January 1, 2026.3

Medicare enrollees who are prescribed the highlighted drugs covered under Part D have paid $3.4 billion out-of-pocket in 2022 to receive their medication.1

“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 Xavier Becerra, JD, HSS Secretary, in a press release.3

According to the press release, these drugs were selected because they accounted for about 20% (nearly $50.5 billion) of drug costs in the total Part D gross covered prescriptions from June 1, 2022 to May 31, 2023 — the same time frame that helped determine whether drugs were qualified for negotiation.3

“Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred. The Biden-Harris Administration will continue working to ensure that Americans with Medicare have access to innovative, life-saving treatments at lower costs,” said Becerra.3

In the future, CMS will select up to 15 more drugs covered under Part D for negotiation for 2027 and continue with 15 more for 2028 before selecting up to 20 more drugs for each following year. Drugs that are covered under Part A and Part D of Medicare will be involved in the selection by year 2028.3

References

1. Medicare Drug Price Negotiation Program: Selected Drugs for Initial Price Applicability Year 2026. CMS.gov. News release. August 2023. Accessed August 29, 2023. https://www.cms.gov/files/document/fact-sheet-medicare-selected-drug-negotiation-list-ipay-2026.pdf

2. FAQs about the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. KFF. News release. August 8, 2023. Accessed August 29, 2023. https://www.kff.org/medicare/issue-brief/faqs-about-the-inflation-reduction-acts-medicare-drug-price-negotiation-program/.

3. HHS Selects the First Drugs for Medicare Drug Price Negotiation. U.S Department of Health and Human Services. News release. August 29, 2023. Accessed August 29, 2023. https://www.hhs.gov/about/news/2023/08/29/hhs-selects-the-first-drugs-for-medicare-drug-price-negotiation.html#:~:text=The%20negotiations%20with%20participating%20drug,in%202022%20for%20these%20drugs.

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