All 10 pharmaceutical companies selected for the first round of Medicare drug price negotiations have agreed to participate in the talks, despite many of them filing lawsuits to halt the process last month. The negotiations are part of President Joe Biden’s Inflation Reduction Act, empowering Medicare to negotiate drug prices for the first time in the program’s history. The negotiation process will extend until August 2024, with reduced prices taking effect in January 2026. The deadline for the drugmakers to sign an agreement for negotiations was on Sunday, and they are required to submit economic and market information by Monday.
The selected drugs and their manufacturers include Eliquis (Bristol Myers Squibb), Jardiance (Boehringer Ingelheim), Xarelto (Johnson & Johnson), Januvia (Merck), Farxiga (AstraZeneca), Entresto (Novartis), Enbrel (Amgen), Imbruvica (AbbVie), Stelara (J&J subsidiary Janssen), and Fiasp and NovoLog (Novo Nordisk).
Drugmakers argue that they had no real choice but to participate due to potential penalties, such as paying an excise tax of up to 95% of their medication’s U.S. sales or withdrawing all products from the Medicare and Medicaid markets. The pharmaceutical industry contends that the process threatens revenue growth, profits, and drug innovation. CMS will host meetings with the companies this fall, and negotiations are expected to save Medicare an estimated $98.5 billion over a decade.
