Contentious Medicare price negotiations underway as US drug prices rise
05 Feb 2024
Preview
Source: Pharmaceutical Technology
President Biden speaking on the first anniversary of the Inflation Reduction Act in Washington, DC in August 2023. Credit: Win McNamee via Getty Images.
The US Department for Health and Human Services (HHS) has sent the first offers to participating drug companies eligible for negotiation under the Medicare price negotiation programme as required by the Inflation Reduction Act (IRA).
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The Centers for Medicare and Medicaid Services is managing these talks, with a 30-day window given to involved drug companies to indicate acceptance of the suggested prices or present an alternative offer. Once both Medicare and the drug company agree on a price, the revised prices will become effective within Medicare in 2026.
The IRA allows Medicare to directly negotiate to reduce prescription prices for certain drugs and requires certain companies to pay rebates back to Medicare if the drug prices exceed the rate of inflation. The first ten drugs selected to be negotiated in the programme include those marketed by pharma giants AstraZeneca and Merck & Co’s anti-diabetic drugs, Farxiga (dapagliflozin), and Januvia (sitagliptin), respectively.
In the announcement accompanying the offers, CMS administrator Chiquita Brooks-LaSure said: “Throughout the negotiation process, CMS is dedicated to improving access to some of the most expensive drugs for people with Medicare while encouraging market competition and fostering innovation.”
The negotiation process has however not been smooth. Industry lobbies such as the Pharmaceutical Research and Manufacturers of America (PhRMA) have consistently come out in opposition to the proceedings. In response to these initial offers, PhRMA’s public affairs senior vice-president Alex Schriver said: “Government bureaucrats are operating behind closed doors to set medicine prices without disclosing for months how they arrived at the price or how much patient and provider input was used.”
See Also:US Senate committee interrogates big pharma on “outrageously high” drug prices
Preview
Source: Pharmaceutical Technology
AstraZeneca posts 81% rise in FY 2023 profit after tax
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Source: Pharmaceutical Technology
After some hesitance, all the companies that manufacture the ten selected drugs have agreed to participate in the negotiation process, which should end by 1 August 2024.
Alongside the announcement of the initial offers, HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE) also released several reports comparing US prescription drug costs to those in other Organisation for Economic Co-operation and Development (OECD) countries. As per the report, in 2022, prescription drug costs in the US were almost three times as expensive as in 33 other OECD countries, with US consumers paying $2.78 for every dollar spent on drugs abroad.
Free ReportHow is the Biopharmaceutical industry evolving?
2021 was a year of continued innovation and change in the Biopharmaceutical industry. As the COVID-19 pandemic continues to take its toll on businesses worldwide, it’s time to look for new ways to create value, prepare for the future, and remain competitive in the ever-changing landscape.
GlobalData’s expansive report examines the business environment and trends that shape the Biopharmaceutical industry. We highlight the most impactful emerging technologies, as well as the industry, regulatory, and macroeconomic factors that influence growth prospects.
Access the report to:
Benchmark the impact of major themes on the Biopharmaceutical industry.
Gain a deeper "on the ground" perspective through exclusive opinions and analysis from industry respondents.
Evaluate the effects of COVID-19 on the sector.
Download the full report to understand what to expect and how to align your strategies for success.
By GlobalData
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Source: Pharmaceutical Technology
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Angola (+244)
Anguilla (+1264)
Antigua & Barbuda (+1268)
Argentina (+54)
Armenia (+374)
Aruba (+297)
Australia (+61)
Austria (+43)
Azerbaijan (+994)
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Bangladesh (+880)
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Botswana (+267)
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Burundi (+257)
Cambodia (+855)
Cameroon (+237)
Canada (+1)
Cape Verde Islands (+238)
Cayman Islands (+1345)
Central African Republic (+236)
Chile (+56)
China (+86)
Colombia (+57)
Comoros (+269)
Congo (+242)
Cook Islands (+682)
Costa Rica (+506)
Croatia (+385)
Cuba (+53)
Cyprus North (+90392)
Cyprus South (+357)
Czech Republic (+42)
Denmark (+45)
Djibouti (+253)
Dominica (+1809)
Dominican Republic (+1809)
Ecuador (+593)
Egypt (+20)
El Salvador (+503)
Equatorial Guinea (+240)
Eritrea (+291)
Estonia (+372)
Ethiopia (+251)
Falkland Islands (+500)
Faroe Islands (+298)
Fiji (+679)
Finland (+358)
France (+33)
French Guiana (+594)
French Polynesia (+689)
Gabon (+241)
Gambia (+220)
Georgia (+7880)
Germany (+49)
Ghana (+233)
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Greenland (+299)
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Israel (+972)
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Kenya (+254)
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Kuwait (+965)
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Latvia (+371)
Lebanon (+961)
Lesotho (+266)
Liberia (+231)
Libya (+218)
Liechtenstein (+417)
Lithuania (+370)
Luxembourg (+352)
Macao (+853)
Macedonia (+389)
Madagascar (+261)
Malawi (+265)
Malaysia (+60)
Maldives (+960)
Mali (+223)
Malta (+356)
Marshall Islands (+692)
Martinique (+596)
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Mayotte (+269)
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Moldova (+373)
Monaco (+377)
Mongolia (+976)
Montserrat (+1664)
Morocco (+212)
Mozambique (+258)
Myanmar (+95)
Namibia (+264)
Nauru (+674)
Nepal (+977)
Netherlands (+31)
New Caledonia (+687)
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Peru (+51)
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Poland (+48)
Portugal (+351)
Puerto Rico (+1787)
Qatar (+974)
Reunion (+262)
Romania (+40)
Russia (+7)
Rwanda (+250)
San Marino (+378)
Sao Tome & Principe (+239)
Saudi Arabia (+966)
Senegal (+221)
Serbia (+381)
Seychelles (+248)
Sierra Leone (+232)
Singapore (+65)
Slovak Republic (+421)
Slovenia (+386)
Solomon Islands (+677)
Somalia (+252)
South Africa (+27)
Spain (+34)
Sri Lanka (+94)
St. Helena (+290)
St. Kitts (+1869)
St. Lucia (+1758)
Sudan (+249)
Suriname (+597)
Swaziland (+268)
Sweden (+46)
Switzerland (+41)
Syria (+963)
Taiwan (+886)
Tajikstan (+7)
Thailand (+66)
Togo (+228)
Tonga (+676)
Trinidad & Tobago (+1868)
Tunisia (+216)
Turkey (+90)
Turkmenistan (+7)
Turkmenistan (+993)
Turks & Caicos Islands (+1649)
Tuvalu (+688)
Uganda (+256)
UK (+44) -->
Ukraine (+380)
United Arab Emirates (+971)
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Palestinian Territory
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Pitcairn
Poland
Portugal
Puerto Rico
Qatar
Réunion
Romania
Russian Federation
Rwanda
Saint Helena, Ascension and Tristan da Cunha
Saint Kitts and Nevis
Saint Lucia
Saint Pierre and Miquelon
Saint Vincent and The Grenadines
Samoa
San Marino
Sao Tome and Principe
Saudi Arabia
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Slovenia
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Sudan
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Swaziland
Sweden
Switzerland
Syrian Arab Republic
Taiwan
Tajikistan
Tanzania
Thailand
Timor-Leste
Togo
Tokelau
Tonga
Trinidad and Tobago
Tunisia
Turkey
Turkmenistan
Turks and Caicos Islands
Tuvalu
Uganda
Ukraine
United Arab Emirates
US Minor Outlying Islands
Uruguay
Uzbekistan
Vanuatu
Venezuela
Vietnam
British Virgin Islands
US Virgin Islands
Wallis and Futuna
Western Sahara
Yemen
Zambia
Zimbabwe
Kosovo
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