AstraZeneca, Bristol Myers Squibb, and Boehringer Ingelheim have announced their willingness to participate in the initial round of Medicare drug price negotiations despite their recent lawsuits seeking to halt the process. These pharmaceutical companies are among the first to agree to the negotiations, which aim to address the increasing costs of prescription drugs for older Americans.
The drugs subject to negotiation include AstraZeneca‘s Type 2 diabetes drug Farxiga, Boehringer Ingelheim’s diabetes drug Jardiance, and Bristol Myers Squibb’s blood thinner Eliquis, among others. While these three companies are willing to participate, the manufacturers of the remaining seven drugs selected for negotiation have until October 1 to decide whether they will join the process.
AstraZeneca stated its commitment to ensuring patient access to Farxiga and its intent to participate in the Centers for Medicare and Medicaid Services (CMS)-led negotiation process. Boehringer Ingelheim expressed its dedication to engaging in transparent conversations with CMS, while Bristol Myers Squibb cited having “no choice” but to sign the agreement, as refusing to do so could result in high penalties or the withdrawal of their medicines from Medicare and Medicaid markets.
Failure to engage in negotiations could lead to drugmakers facing excise taxes of up to 95% of their medication’s U.S. sales or the removal of their products from Medicare and Medicaid markets, according to CMS regulations.
These pharmaceutical companies, along with others like Johnson & Johnson and Merck, have filed multiple lawsuits challenging the constitutionality of the negotiation process. The pharmaceutical industry strongly opposes these negotiations, fearing potential impacts on revenue, profits, and drug innovation. However, analysts anticipate limited financial losses initially, particularly as many of the selected drugs are nearing patent expirations. For instance, Farxiga is expected to lose market exclusivity in 2026, coinciding with the expected implementation of renegotiated prices.
The Inflation Reduction Act, passed by Congress last year, marked a significant shift by allowing Medicare to negotiate drug prices for the first time in its history. This legislation is central to the Biden administration’s efforts to control rising drug costs and has been a key achievement for the Democratic Party. The negotiation process, initiated last month, is set to continue until August 2024.
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