Blood thinners, diabetes meds among first 10 drugs for US price
negotiations
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[August 30, 2023]
By Patrick Wingrove and Michael Erman
(Reuters) -The Biden administration on Tuesday released its list of 10
prescription medicines that will be subject to the first-ever price
negotiations by the U.S. Medicare health program that covers 66 million
people, with big-selling blood thinner Eliquis from Bristol Myers Squibb
and Pfizer among them.
President Joe Biden’s signature Inflation Reduction Act (IRA), signed
into law last year, allows Medicare to negotiate prices for some of its
most costly drugs.
"Today is the start of a new deal for patients,” Biden said at a White
House event, adding that Americans often pay two to three times more
than other countries for the same drugs.
Once implemented, the prices on negotiated drugs will decrease for up to
9 million seniors who currently pay as much as $6,497 in out-of-pocket
costs per year for these prescriptions, Biden said.
Medicare, which mostly serves Americans aged 65 and over, pays twice as
much for drugs than the U.S. Department of Veterans Affairs, which
already negotiates drug prices, he said.
Merck & Co's diabetes drug Januvia, Eliquis rival Xarelto from Johnson &
Johnson, and AbbVie's leukemia treatment Imbruvica were also selected.
![](http://archives.lincolndailynews.com/2023/Aug/30/images/ads/current/danieleeten_sda_FAIR_2023.png)
Other medicines picked for negotiations include Amgen's rheumatoid
arthritis treatment Enbrel, Boehringer Ingelheim and Eli Lilly's
diabetes drug Jardiance, J&J's arthritis and Crohn's disease medicine
Stelara and insulin from Novo Nordisk.
Shares of drugmakers were mixed on Monday afternoon. The NYSE Arca
Pharmaceutical index was up around 0.4%.
Tuesday's announcement kicks off the negotiation process for the 10
drugs whose new prices will go into effect in 2026. The program aims to
save $25 billion per year on drug prices by 2031.
U.S. laws had prohibited Medicare from negotiating pharmaceutical prices
as part of its prescription drug program that began about 20 years ago.
The U.S. Centers for Medicare & Medicaid Services (CMS) spent $50.5
billion between June 1, 2022 and May 31, 2023 on the 10 drugs, which is
the time period used to determine which medicines were eligible for
negotiation. That was about 20% of the total cost of drugs in the
Medicare prescription drug program known as Part D.
![](http://archives.lincolndailynews.com/2023/Aug/30/images/ads/current/goodman_sda_FAIR_2022.png)
Wells Fargo analyst Mohit Bansal said the savings from negotiations on
Jardiance, Januvia, AstraZeneca's Farxiga and Novo's Insulin Aspart,
which cost the agency about $16.5 billion total, could potentially free
up Medicare's budget and make it easier to cover diabetes or obesity
drugs.
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![](../images/083023PIX/health37.jpg)
A pharmacist holds a bottle of the drug
Eliquis, made by Pfizer Pharmaceuticals, at a pharmacy in Provo,
Utah, U.S. January 9, 2020. REUTERS/George Frey/File photo
![](http://archives.lincolndailynews.com/2023/Aug/30/images/ads/current/debbiesflora_lda_081123.png) CLINICALLY APPROPRIATE ACCESS
Novartis, whose heart failure drug Entresto was among the 10
selected, Eli Lilly and Merck said they believed the price-setting
would stifle innovation in the sector and impact quality of care.
AstraZeneca and Novo Nordisk said they were evaluating next steps.
Bristol Myers CEO Giovanni Caforio in an interview said the
inclusion of Eliquis would not impact its long-term strategy,
particularly as the drug loses patent exclusivity in 2028, two years
after the negotiated prices would take effect.
Caforio said Medicare enrollees on the drug could see their access
restricted because of unintended consequences of the law.
"There is no requirement in the law that insurance companies that
administer Medicare benefits will actually continue to make these
medicines available to patients without hurdles or burdensome cost
sharing," he said.
CMS Director Dr. Meena Seshamani said Medicare plans to use a review
process to make sure insurance companies keep clinically appropriate
access to negotiated drugs.
Competition for J&J's Stelara is expected to hit the U.S. market in
2025, before negotiated prices go into effect, following deals with
Amgen, Alvotech and Teva that delayed launches of their near copies,
known as biosimilars.
Analysts had said the delays put J&J back on track for $57 billion
in 2025 pharmaceutical revenue.
Bristol Myers, J&J, Merck, AstraZeneca, and Germany-based Boehringer
have also sued the U.S. Department of Health and Human Services,
which oversees the Medicare agency, in an effort to derail the
price-setting process.
BMO Capital Markets analyst Evan Seigerman said that while the list
includes many big revenue generators, many of them will face
competition shortly after or even before 2026, which was expected to
lessen their profitability.
Two analysts said they expect the negotiated prices to move beyond
Medicare and affect commercial markets for these drugs by 2026, when
they come into effect.
The 10 initial drugs were chosen based on certain criteria set out
by Medicare. They must be sold in pharmacies, not have substantial
generic competition, and have been on the market for at least nine
years - 13 for more complex biotech drugs.
(Reporting by Patrick Wingrove, Mike Erman, Manas Mishra in
Bengaluru and Nandita Bose in Washington;Editing by Caroline Humer,
Bill Berkrot and Chizu Nomiyama)
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