In a significant move towards health care affordability, the Biden-Harris Administration confirmed on October 3, 2023, that ten major pharmaceutical companies will participate in Medicare's first-ever drug price negotiations. This initiative directly targets some of the highest-priced and most frequently prescribed medications, aiming to bring financial relief to countless Medicare beneficiaries.
The Biden-Harris Administration announced that all 10 drug companies whose drugs were selected for price negotiation with Medicare for the first cycle of the program have decided to participate in those negotiations. These companies manufacture some of the costliest and most commonly used prescription drugs.
Participating in the Medicare Drug Price Negotiation Program are the manufacturers: Bristol Myers Squibb with Eliquis, Boehringer Ingelheim with Jardiance, Janssen Pharms with Xarelto, Merck Sharp Dohme for Januvia, AstraZeneca AB with Farxiga, Novartis Pharms Corp for Entresto, Immunex Corporation's Enbrel, Pharmacyclics LLC with Imbruvica, Janssen Biotech, Inc. for Stelara, and Novo Nordisk Inc.'s Fiasp and NovoLog series.
According to the release, between June 1, 2022, and May 31, 2023, these ten selected drugs accounted for a staggering $50.5 billion in Part D gross covered prescription drug costs, roughly 20% of the total expenditure in this category. Last year, Medicare beneficiaries spent an aggregate of $3.4 billion out-of-pocket for these medications.
Expressing optimism over this initiative, HHS Secretary Xavier Becerra remarked, "This collaboration with the ten pharmaceutical giants underscores our commitment to making healthcare more affordable for all Americans. We aim to ensure that no senior citizen is compelled to choose between life-saving medications and basic essentials like food."
Factors influencing the negotiation process will encompass the clinical benefits of the drug, its potential to address existing medical gaps, and its overall impact on Medicare recipients, among other considerations.
In terms of next steps, the CMS will announce the negotiated prices by September 1, 2024. Beneficiaries can expect these rates to be effective starting January 1, 2026. The Administration, drawing from the provisions of the Inflation Reduction Act, anticipates expanding the list of drugs for negotiation in the coming years, reinforcing its commitment to healthcare affordability.
