Medicare starts process for negotiating price cuts for drugs used by millions of Americans

The Department of Health and Human Services on Tuesday announced the first 10 drugs for which Medicare would begin negotiating lower prices with pharmaceutical companies. The process is moving forward despite unified Republican opposition in Congress to the Inflation Reduction Act of 2022, which gave the federal government new powers to combat rising drug costs.

“There is no reason why Americans should be forced to pay more than any developed nation for life-saving prescriptions just to pad Big Pharma’s pockets,” President Joe Biden said in a statement announcing the action.

According to the department, more than 8.2 million people with Medicare Part D coverage used the drugs in question between June 1, 2022, and May 1, 2023, the dates used to determine which medications would be involved in the first round of negotiations. Enrollees paid $3.4 billion in 2022 in out-of-pocket costs for the drugs in question, which are used to treat diabetes, heart failure, blood cancers, kidney disease and other ailments.

The drugs are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara and Fiasp/NovoLog.

The federal health department said the Centers for Medicare and Medicaid Services would begin negotiating with drug companies in 2023 and 2024 and that any lowered prices that were agreed upon would take effect for consumers in 2026.

Advocates for older Americans praised the news.

“Allowing Medicare to negotiate prices for these first 10 drugs will finally bring much needed access and relief to American families, particularly older adults,” AARP executive vice president Nancy LeaMond said in a release. “We cannot overstate how monumental this law is for older Americans’ financial stability and overall health.”

Ramsey Alwin, president and CEO of the National Council on Aging, said in a statement, “Today’s announcement is a game changer for the millions of older adults who rely on these medications every day.”

Biden signed the Inflation Reduction Act into law in 2022 after the legislation passed Congress on a party-line vote with only Democratic support (with a tiebreaking vote in the Senate cast by Vice President Kamala Harris).

Republican members of Congress specifically attacked the provision in the law that led to drug price negotiations.

“Don’t expect drug prices to come down,” then-House Minority Leader Kevin McCarthy said in an Aug. 12, 2022, speech. “This bill would cut treatments and hinder new cures by giving bureaucrats the power to decide what drugs seniors can access. It reduces your options and raises your costs.”

Senate Republicans introduced legislation in October 2022 focused on preventing Medicare from negotiating lower prices. “Price controls never work,” Sen. Mike Lee of Utah, one of the bill’s co-sponsors, said in a statement at the time. “Mandating fixed prescription drug prices will ultimately result in the shortening of American lives.”

House Republicans proposed legislation that would repeal the entire Inflation Reduction Act after winning control of the chamber in the 2022 midterm elections. The bill has not yet advanced to a full House vote.

Republicans running for the party’s presidential nomination have also spoken out against the law. Former President Donald Trump complained about regulations in the bill, Florida Gov. Ron DeSantis promised to repeal it if elected, and former Vice President Mike Pence claimed the law undermined manufacturers’ incentives to create new lifesaving drugs.

Major pharmaceutical companies, which saw their profits rise last year as drug prices increased, also oppose the price negotiation provisions. Merck, Bristol Myers Squibb, Johnson & Johnson, and AstraZeneca have sued the federal government to block negotiations.

Public opinion overwhelmingly favors the law. In a poll of 1,002 voters conducted by Hart Research Aug. 12-14, 88% said they favored Medicare having negotiation powers. Just 12% said they opposed it.

Published with permission of The American Independent Foundation.