UNITED STATES: 10 prescription drugs, including the popular blood thinner Eliquis from Bristol-Myers Squibb (BMY.N) and Pfizer (PFE.N), were listed by the Biden administration on Tuesday as being up for the first-ever price negotiations by the 66 million-person Medicare health programme in the United States.
The 66 million-person Medicare program, which covers Americans 65 and older, now has the ability to negotiate discounts on some of its most expensive medications through President Joe Biden’s signature Inflation Reduction Act.
Biden argues that Americans should not pay more for life-saving prescriptions to support Big Pharma, stating that once negotiated drug rates are implemented, they will become less expensive for up to 9 million seniors who currently pay up to $6,497 annually. The medications include Imbruvica from AbbVie, Xarelto from Johnson & Johnson, and Januvia from Merck & Co.
Pharmaceutical companies are negotiating new costs for ten medications, including Enbrel, Jardiance, Stelara, and insulin. The negotiations are expected to save $25 billion in annual drug prices by 2031. The S&P 500 index was up 0.6% in premarket trading. The negotiations for these medications, which will take effect in 2026, are now officially underway.
The US Centres for Medicare and Medicaid Services (CMS) spent $50.5 billion between June 1, 2022, and May 31, 2023, on 10 medications, excluding Part D Medicare, to ensure compliance with US legislation that prohibits haggling over drug prices, accounting for around 20% of the overall drug cost.
Pharmaceutical companies like Novartis, Eli Lilly, and Merck have expressed concerns that price-setting rules could hinder industry innovation and negatively impact healthcare quality. AstraZeneca and Novo Nordisk are considering their options.
Near copies of J&J’s Stelara are expected to reach the US market in 2025, following agreements with Amgen, Alvotech, and Teva.
AstraZeneca, Johnson & Johnson, Merck, Bristol-Myers, and Boehringer Ingelheim have filed lawsuits against the US Department of Health and Human Services to halt the Medicare price-setting process.
Analysts predict that when the negotiated rates go into force in 2026, they will affect commercial markets for these pharmaceuticals in addition to Medicare.
The first ten medications were chosen based on Medicare-specified criteria. They must be available in pharmacies, have no significant generic competition, and have been on the market for at least nine years or thirteen years for more complicated biotech drugs.
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