WASHINGTON (AP) — The blood thinner Eliquis and popular diabetes treatments including Jardiance are among the first drugs that will be targeted for price negotiations in an effort to cut Medicare costs.
President Joe Biden’s administration on Tuesday released a list of 10 drugs for which the federal government will take a first-ever step: negotiating drug prices directly with the manufacturer.
The move is expected to cut costs for some patients but faces litigation from the drugmakers and heavy criticism from Republican lawmakers. It’s also a centerpiece of the Democratic president’s reelection pitch as he seeks a second term in office by touting his work to lower costs for Americans at a time when the country has struggled with inflation.
The diabetes treatments Jardiance from Eli Lilly and Co. and Merck’s Januvia made the list, along with Amgen’s autoimmune disease treatment Enbrel. Other drugs include Entresto from Novartis, which is used to treat heart failure.
“For many Americans, the cost of one drug is the difference between life and death, dignity and dependence, hope and fear,” Biden said in a statement. “That is why we will continue the fight to lower healthcare costs — and we will not stop until we finish the job.”
Casey, Cartwright applaud announcement
U.S. Sen. Bob Casey, D-Scranton, Chairman of the U.S. Senate Committee on Aging, applauded the Biden Administration’s announcement of the first 10 prescription drugs selected for Medicare price negotiations.
In August 2022, Democrats in Congress passed the Inflation Reduction Act (IRA), which allowed Medicare to directly negotiate the price of prescription drugs for the first time. The announcement of the first set of drugs to be selected for negotiations is the beginning of a process which will lower prescription drug costs for the 63 million Americans on Medicare.
“In the Inflation Reduction Act, Democrats fought hard to finally allow Medicare to negotiate drug prices,” Casey said. “Because of this law, pharmaceutical companies will no longer be able to charge Medicare recipients unfair prices for the medications they need, and millions of Americans will see lower drug costs as a result. This is a huge step to lower drug costs for Americans, but it’s also just the beginning. More drugs will be added to the list in the years to come, and Democrats are going to keep fighting to lower everyday costs for Americans and ensure that families don’t have to choose between their health and their bank account.”
U.S. Rep. Matt Cartwright, D-Moosic, also praised the announcement.
“For the first time ever, Medicare is now able to negotiate with drug companies for lower prices, saving seniors money on costly medications,” Cartwright said. “This provision is unprecedented — and one that the pharmaceutical industry has fought for decades.
“For far too long, big drug companies have forced way too many seniors to choose between paying for lifesaving medications and putting food on the table. With the Inflation Reduction Act now the law of the land, we finally have the power to rein in Big Pharma’s price gouging and reduce costs for both seniors and the federal government.”
Here is a list of the drugs included and the conditions they’re commonly used for. Negotiated prices will go into effect beginning in 2026.
Eliquis (Prevention and treatment of blood clots)
Jardiance (Diabetes; Heart failure)
Xarelto (Prevention and treatment of blood clots; Reduction of risk for patients with coronary or peripheral artery disease)
Januvia (Diabetes)
Farxiga (Diabetes; Heart failure; Chronic kidney disease)
Entresto (Heart failure)
Enbrel (Rheumatoid arthritis; Psoriasis; Psoriatic arthritis)
Imbruvica (Blood cancers)
Stelara (Psoriasis; Psoriatic arthritis; Crohn’s disease; Ulcerative colitis)
Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, NovoLog PenFill (Diabetes)
In addition to allowing Medicare to negotiate drug prices for the first time, the IRA also capped the cost of insulin for Medicare Part D patients at $35 a month for certain covered insulin products starting last January.
It also will limit their out-of-pocket costs at $2,000 per year beginning in 2025 and instituted a new provision to impose penalties on drug companies that hike up prices in Medicare above the rate of inflation.
It also makes eligible vaccines, including the shingles vaccine, free for seniors with Medicare Part D and expands cost-sharing assistance for low-income people with Medicare.
Billions in costs
The drugs on the list announced Tuesday accounted for more than $50 billion in Medicare prescription drug costs between June 1, 2022, and May 31, according to the Centers for Medicare and Medicaid Services, or CMS.
Medicare spent about $10 billion in 2020 on Eliquis, according to AARP research. The drug treats blood clots in the legs and lungs and reduces the risk of stroke in people with an irregular heartbeat called atrial fibrillation.
More than 52 million people who either are 65 or older or have certain severe disabilities or illnesses get prescription drug coverage through Medicare’s Part D program, according to CMS.
About 9% of Medicare beneficiaries age 65 and older said in 2021 that they did not fill a prescription or skipped a drug dose due to cost, according to research by the Commonwealth Fund, which studies health care issues.
The agency aims to negotiate the lowest maximum fair price for drugs on the list released Tuesday. That could help some patients who have coverage but still face big bills like high deductible payments when they get a prescription.
Currently, pharmacy benefit managers that run Medicare prescription plans negotiate rebates off a drug’s price. Those rebates sometimes help reduce premiums customers pay for coverage. But they may not change what a patient spends at the pharmacy counter.
Drug companies that refuse to be a part of the new negotiation process will be heavily taxed.
Republican lawmakers also have blasted the Biden administration for its plan, saying companies might pull back on introducing new drugs that could be subjected to future haggling. They’ve also questioned whether the government knows enough to suggest prices for drugs.