• by Les Luchter , August 29, 2023

On Tuesday, the U.S. government selected 10 drugs as the first subject to Medicare price negotiations under the Inflation Reduction Act (IRA) passed last year.

The 10 drugs -- which the government says accounted for 20% of Medicare prescription drug costs during the one-year period ending May 31 -- come from at least nine different marketers. Only Johnson & Johnson has two on the list, both through its Jannsen unit: the blood thinner Xarelto and Stelara, used for a range of conditions including psoriasis and Crohn’s disease.

Another blood thinner, Bristol-Myers Squibb/Pfizer’s Eliquis, accounted for the most money shelled out by Medicare during the year in question: $16.5 billion, more than double the second costliest drug, Boehringer Ingelheim and Eli Lilly’s Jardiance, which treats diabetes and heart failure.

Three other diabetes drugs will be entering negotiations: Merck’s Januvia, AstraZeneca’s Farxiga, and Novo Nordisk’s Fiasp/NovoLog.

The medicines also include Novartis’ Entresto (for heart failure), Amgen’s Enbrel (arthritis/psoriatis) and Abbvie’s Imbruvica (blood cancers).

The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), said that together, the 10 drugs accounted for $50.5 billion in Medicare costs during the one-year period.

“Medicare spends more than $135 billion on prescription drugs every year,” Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer, said in a release.“This is an important first step toward finally allowing Medicare to use its purchasing power to lower drug prices.”

Big pharma has been fighting against Medicare price negotiations, with at least five of today’s targeted marketers battling directly against the IRA in court, and others through their trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA). 

Accountable.US, which calls itself a nonpartisan watchdog group, on Tuesday was quick to point out that three big pharma companies alone -- Merck, J&J’s Jannsen, and Eli Lilly – reported combined earnings of $38.7 billion in 2022, and that the industry spent hundreds of millions of dollars lobbying Congress last year. PhRMA spent nearly $70 million against Medicare negotiations and other measures to lower drug costs in the years leading up to the IRA passage.

“This historic achievement is still under threat,” said Accountable.US executive director Tony Carrk, “because the MAGA House Majority is hellbent on repealing the Inflation Reduction Act.”

“Today's announcement is the result of a rushed process focused on short-term political gain rather than what is best for patients," PhRMA president and CEO Stephen J. Ubl said in a statement. "Many of the medicines selected for price setting already have significant rebates and discounts due to the robust private market negotiation that occurs.”

Speaking for the other side, HHS Secretary Xavier Becerra noted that “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.”

CMS said willit  publish agreed-upon negotiated prices for the 10 drugs by September 1, 2024, with the prices going into effect on January 1, 2026. An additional 15 drugs will be selected for 2027 and 2028, and then up to 20 more drugs for each year after that.

The government previously announced a $35 monthly cap on insulin costs.