Medicare participants will get insight this year into how much the prices of certain drugs will drop under government plans to improve access to and lower the cost of medications.
Medicare is federal health insurance for those aged 65 and older, and some individuals under 65 with certain disabilities or health conditions. Part D of Medicare covers helps cover the cost of prescription drugs as well as some vaccines.
As part of President Joe Biden’s Inflation Reduction Act, the Centers for Medicare & Medicaid Services (CMS) has been given the freedom to directly negotiate the prices of selected drugs with manufacturers. The CMS has selected 10 drugs used to treat a variety of illnesses and conditions after cost increases in recent years.
The plans were enacted after government research found that “Medicare spending on the 10 drugs more than doubled from 2018 to 2022 – a rate that was 3 times faster than all Part D drugs over the same period,” according to a release from the White House. “The report also shows that 7 of the 10 drugs selected received direct at least one form of federal support towards their drug development or utilized a federal-funded invention for their development,” the statement continued.
However, the Biden administration’s plans have been met with lawsuits by drug companies that have products up for negotiation. Merck, Johnson & Johnson, Bristol Myers Squibb, AstraZeneca, Novo Nordisk, Novartis and Boehringer Ingelheim are all in the process of suing to halt the negotiation process.
Drug manufacturers have claimed the cost reduction plans violate the Fifth Amendment, which requires the state to pay compensation for any private property taken for public use. Newsweek has contacted the CMS for comment via email.
Will Drug Prices Drop in 2024?
Unfortunately, drug prices will not be pushed down in 2024 as a result of the Inflation Reduction Act—but that doesn’t mean changes aren’t on the horizon.
The CMS will send its maximum fair price, along with a justification, to each company participating in the negotiation program. Companies then have 30 days to accept or propose a counteroffer.
However, the process is a lengthy one, meaning Medicare drug prices will not be pushed down as a result of current negotiations until 2026. According to the timeline, CMS will publish any changes to prices on September 1, 2024, which will then be introduced on January 1, 2026.
As the process continues, more prescription drugs will be put up for negotiation, including more specialized drugs that are covered by Medicare Part B. After the first round of price changes are announced, the CMS can negotiate prices for another 15 drugs that will go into effect in 2027 as well as an additional 15 that will change in price in 2028.
That number is expected to rise to 20 medications a year beginning in 2029.
Which Drugs Will Change in Price?
For the first round of negotiations between the government and healthcare companies, only selected drugs that treat a range of conditions and illnesses are being discussed. These are:
- Eliquis
- Jardiance
- Xarelto
- Januvia
- Farxiga
- Entresto
- Enbrel
- Imbruvica
- Stelara
- Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill
These drugs are among the top 50 with the highest spending for Medicare Part D, which covers prescription medications for America’s senior citizens. They individually cover a range of conditions, including diabetes, arthritis, Crohn’s disease and cancer.
Exactly how much the selected drugs will change in price will not be known until offers have been accepted by drug companies and negotiations have closed.
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