The U.S. Department of Health and Human Services (HHS) has released revised drug price negotiation guidance from the Centers for Medicare and Medicaid Services (CMS). The actions implement the Inflation Reduction Act (IRA), which already saves covered seniors and disabled individuals hundred of dollars a year.
The CMS guideline "is a critical step in implementing the IRA, which finally took on Big Pharma and will allow Medicare to negotiate lower drug prices on behalf of people with Medicare," HHS states in a June 30 press release.
Beginning this year, Medicare will start direct negotiations with drug makers to lower the cost of high-priced prescription drugs that are covered. CMS will announce by Sept. 1 the first 10 medications chosen for negotiation. Initial rounds of negotiations will take place in 2023 and 2024, according to the release, with negotiated prices going into effect Jan 1, 2026, the release states.
CMS released its initial guidance for the drug price negotiation process in March, the release states. Those guidelines described how the agency will choose which drugs to negotiate this year and how the negotiations will proceed. The CMS' updated program guidance released June 30 is based on public feedback and outlines how CMS will bargain with participating manufacturers to agree on a maximum fair price for a chosen drug. This will guarantee that Medicare beneficiaries have access to cutting-edge, life-saving treatments at prices that will be more affordable for both them and Medicare, according to the release.
Additionally, HHS stated that as of July 1, individuals who receive insulin through Medicare Part B and Medicare Advantage and use a conventional pump will be covered by President Joe Biden's $35 monthly cap on insulin costs. The IRA's $35 monthly cap on insulin costs already benefits millions of Medicare Part D patients, and 1.5 million beneficiaries would have saved an average of $500 year in 2020 if similar regulations for Part B and Part D had been in place, according to the release.
HHS Sec. Xavier Becerra said in the release that the Biden administration and the HHS "isn't letting anything get in our way of delivering lower drug costs for Americans."
"Pharmaceutical companies have made record profits for decades," Becerra said in the release. "Now they're lining up to block this Administration’s work to negotiate for better drug prices for our families. We won’t be deterred."
