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Drugmakers will likely be able to handle the impacts of the third round of Medicare negotiations, analysts say, even as the biopharma industry continues to criticize the Biden-era program. On Tuesday, CMS unveiled the next 15 drugs up for negotiation, which include AbbVie’s Botox, Eli Lilly’s diabetes drug Trulicity, and Gilead’s HIV treatment Biktarvy. Analysts said some of the drugs were widely anticipated to make the list. They cited past negotiations, upcoming patent losses and new drug development as some reasons why the potential impacts may be modest. “With prior rounds of pricing negotiations reasonable, and several of these medicines set to lose exclusivity in the near-term, we continue to expect that the impacts will be manageable,” BMO Capital Markets analyst Evan Seigerman said in a note to investors. He called out Biktarvy, Botox, Trulicity, Eisai’s Lenvima, Bristol Myers Squibb’s Orencia, Lilly’s Verzenio and Pfizer’s Xeljanz specifically, as they fall under BMO’s coverage. CMS said the 15 new drugs on the list cost Medicare Part B and Part D about $27 billion from November 2024 through October 2025. But Leerink analysts suggested in a note that Biktarvy is “the only one of the 15 drugs that has [estimated] Medicare exposure that is material.” Even so, Leerink analyst Daina Graybosch told Endpoints News in an interview that the impact on Gilead’s revenue is likely “modest.” “Investors are thinking more about the growth beyond Biktarvy anyways,” she said, citing the company’s “really rich HIV pipeline.” Gilead launched its twice-yearly drug for HIV prevention Yeztugo last year, and said earlier this month that it hopes to have up to seven HIV prevention and treatment launches by the end of 2033. A Gilead spokesperson said on Wednesday that the company plans to participate in negotiations, and is “committed to demonstrating the value and innovation of our medicines while supporting patient access and affordability.” Some drugmakers continue to attack the program. Novartis called the program unconstitutional in a statement to Endpoints on Tuesday, and Bristol Myers said “the IRA’s forced sale regime is deeply flawed.” The BMS spokesperson added that the program “creates negative, long-term implications on patient access, R&D and future innovation.” Novartis and BMS are two of six drugmakers that have asked the Supreme Court to review challenges they brought against the first round of Medicare negotiations. PhRMA EVP of policy and research Elizabeth Carpenter said the law is “the wrong approach for Americans,” and is “undermining future medical progress.” Some drugmakers suggested in early statements they would cooperate with CMS. UCB said it is “prepared to work collaboratively” with the agency in discussions for its drug Cimzia. Takeda said it anticipated the inclusion of its drug Entyvio for Crohn’s disease and ulcerative colitis, and has been “actively preparing” for possible negotiations. A spokesperson said the company is “focused on supporting continued access to Entyvio for patients who may benefit from this critical medicine.” Otsuka, which markets the  antipsychotic medicine Rexulti with Lundbeck, told Endpoints that it “remains committed to ensuring patients have access to safe and effective treatments for serious mental illnesses and neurological conditions.” Lundbeck noted that Rexulti’s patent expiration is in mid-2029, and that “approximately 35% of US Rexulti revenue is exposed to Medicare.”

The federal government announced the next 15 medicines for which it will seek price reductions with the help of Medicares new negotiating power, including the breast cancer drugs Kisqali and Verzenio and the HIV treatment Biktarvy. Those cuts, which are allowed through the Inflation Reduction Act, will go into effect in 2028.Also included in the third annual round of price negotiations were the rheumatoid arthritis medicines Orencia, Cimzia and Xeljanz, as well as Botox when its used for therapeutic purposes like migraines. The Centers for Medicare and Medicaid Services designated these drugs for price negotiations under IRA provisions meant to limit expenditures on the drugs associated with the programs highest costs.Combined, the 15 drugs account for $27 billion in Medicare spending and are used by some 1.8 million enrollees. Eli Lillys weekly GLP-1 shot for diabetes, Trulicity, is associated with $4.9 billion in annual costs, the highest of any medication on the list.CMS is taking strong action to target the most expensive drugs in Medicare, negotiate fair prices, and make sure the system works for patients not special interests, said CMS Administrator Mehmet Oz, in a statement. This approach delivers real savings while strengthening accountability across the program.For the first time, these negotiations will include medicines covered by its Part B program that involves drugs administered in a physicians office or other healthcare facility. Orencia, Cimzia and Botox are three examples.However, two key drugs that had been previously been expected to make this years list the widely used cancer immunotherapies Keytruda and Opdivo were left off. The inclusion of both was delayed by at least a year through provisions of the One Big Beautiful Bill Act, which changed the way the IRA program is applied to certain drugs.The price cuts will, as a result, be immaterial for most of the companies whose drugs are on the list, according to Leerink Partners analyst David Risinger. The one exception is Biktarvy, which has Medicare revenue that could represent 8% of Gilead Sciences 2027 sales, Risinger wrote in a note to clients.The exposure for all of the other companies involved comes to 3% or less of overall revenue, Risinger wrote.Nonetheless, the industry group Pharmaceutical Research and Manufacturers of America railed against the announcement. The group argued that the IRA is undermining future medical progress by discouraging investment in new drugs, particularly the chemical, or small molecule, drugs that are subject to IRA price negotiations sooner than biologic medications.CMS is now planning to set prices for additional small molecule cancer treatments that would otherwise be spared without this penalty driving even more investment away from these critical treatment options, said Elizabeth Carpenter, the groups executive vice president of policy and research, in a statement.The first round of price negotiations, conducted in 2024,took effect this year. '