HealthMedicare Sends Initial Price Negotiation Bids to Drugmakers

Medicare Sends Initial Price Negotiation Bids to Drugmakers

Public Health & Policy
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Medicare

— Manufacturers of 10 drugs have 30 days to accept or make a counter-offer

by
Joyce Frieden, Washington Editor, MedPage Today
February 1, 2024

The Biden administration sent its first bid to the manufacturers of 10 drugs involved in Medicare drug price negotiations, HHS Secretary Xavier Becerra said Thursday.

“Today is another milestone on the march to ensure people with Medicare get fair prices for prescription drugs,” Becerra said in a statement. “I am confident that this process will lead to lower prices, putting an end to exorbitant price gouging by pharmaceutical companies.”

“Allowing Medicare to negotiate drug prices is just one tool we’re using to lower prices thanks to the president’s lower-cost prescription drug law,” he added. “From capping insulin at $35 per month, to making drug companies pay a rebate for raising their prices faster than inflation, to capping out-of-pocket costs in Part D, we are delivering on [our] promise” to lower drug prices for Americans.

The prescription drug law Becerra referred to was the Inflation Reduction Act (IRA), which contained a provision allowing Medicare to negotiate the price of certain drugs. These drugs include medications in which at least 7 years — 11 years for a biologic — have elapsed between the FDA’s approval or licensure of the drug or biologic, and for which there is no generic or biosimilar competition. In addition, the drugs or biologics are among those with the highest total gross Part D-covered prescription drug costs.

In August, the administration released its list of the first 10 drugs subject to negotiation, which included:

  • Apixaban (Eliquis): a blood thinner used to prevent stroke and blood clots
  • Empagliflozin (Jardiance): a drug used to treat type 2 diabetes and heart failure
  • Rivaroxaban (Xarelto): a blood thinner used to treat and prevent blood clots and reduce risks for patients with coronary or peripheral artery disease
  • Sitagliptin (Januvia): a drug for treating type 2 diabetes
  • Dapagliflozin (Farxiga): a drug for treating type 2 diabetes, heart failure, and chronic kidney disease
  • Sacubitril/valsartan (Entresto): a drug for patients with chronic heart failure
  • Etanercept (Enbrel): a drug for moderate to severe rheumatoid arthritis
  • Ibrutinib (Imbruvica): a drug that is used to treat chronic lymphocytic leukemia/small lymphocytic lymphoma
  • Ustekinumab (Stelara): a biologic that treats Crohn’s disease, ulcerative colitis, psoriasis, and psoriatic arthritis
  • Insulin aspart injection (NovoLog, among others): a drug for patients with diabetes mellitus

In terms of total Medicare Part D costs over the last year (June 2022 to May 2023), apixaban cost the most, at $16.5 billion for the 3.7 million enrollees taking the medication (total cost of $4,448 per enrollee). This was followed by empagliflozin ($7.1 billion), rivaroxaban ($6.0 billion), and sitagliptin ($4.1 billion).

Thursday was the deadline for the Centers for Medicare &

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