Pharmaceutical companies that make the first 10 prescription drugs on Medicare’s prospective price negotiation list have agreed to participate in possible cost reductions.
“We look forward to engaging with the drug manufacturers of the selected drugs that have decided to participate in the Medicare Drug Price Negotiation Program,” Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure said in a statement released Tuesday. “Our goal is to ensure access to innovative treatments and therapies for people that need them when they need them. Medicare will negotiate in good faith consistent with the requirements of the law on behalf of people with Medicare.”
The medications that made the list are commonly used in nursing homes and other long-term care settings, and are covered under Medicare Part D. In August, CMS disclosed which medications made the list.
Among those on the list are Eliquis, a blood thinner with an average out-of-pocket cost of $608 per Medicare enrollee in 2022; it is used by more than 3.7 million people on Medicare. Also, Jardiance, the diabetes drug used by about 1.6 million people on Medicare, cost $490 out-of-pocket for enrollees last year. Other drugs on the list include Xarelto, Januvia, Enbrel, Stelara and Farxiga, among others.
During the last year, 9 million people who use Medicare paid more than $3.4 billion on these 10 drugs alone, the White House said (and the Associated Press reported).
“For decades, drug companies in America made record profits while big pharma worked to block Medicare from being able to negotiate lower drug prices for seniors. In fact, Americans now pay two to three times more than people in other countries for the exact same prescription drug made by the exact same company,” President Joe Biden said in an online video on Tuesday. “So my administration finally took a step to change that.”
It’s not clear yet how much the costs for the prescription medicines could decline. Any price negotiations won’t go into effect until 2026. The federal government gave the drug manufacturers a month to choose if they wanted to participate. If they didn’t, they could be subject to tax penalties. Merck and Johnson & Johnson are two drug-makers suing the federal government over the negotiation provision. They say the negotiations could reduce their profits, limiting how much they can spend to research and develop drugs. Merck and Johnson & Johnson both make drugs on the list.
