The US government has announced the ten drugs selected for the first round of pricing negotiations under President Biden’s Inflation Reduction Act (IRA).
The IRA allows Medicare, the government health plan for older adults, to negotiate lower prices for a selected group of prescription medicines.
The list includes Bristol Myers Squibb and Pfizer’s Eliquis (apixaban), Novartis’ Entresto (valsartan/sacubitril), Amgen’s Enbrel (etanercept), AstraZeneca’s Farxiga (dapagliflozin), Merck & Co’s Januvia (sitagliptin), Eli Lilly and Boehringer Ingelheim’s Jardiance (empagliflozin) and Novo Nordisk’s Novolog/Fiasp (insulin aspart).
Johnson & Johnson’s Stelara (ustekinumab) and Xarelto (rivaroxaban) are also listed, as well as its AbbVie-partnered Imbruvica (ibrutinib).
Collectively, the drugs accounted for more than $45bn in Medicare Part D spending from June 2022 to May 2023, according to a Centers for Medicare and Medicaid Services fact sheet.
Once implemented, the prices of negotiated drugs will decrease for up to 9 million seniors who currently pay up to $6,497 in out-of-pocket costs per year for these prescriptions, the Biden administration outlined in a statement.
“For far too long, Americans have paid more for prescription drugs than any major economy. And while the pharmaceutical industry makes record profits, millions of Americans are forced to choose between paying for medications they need to live or paying for food, rent, and other basic necessities,” the administration said.
After the negotiation period, the new prices will be announced in September 2024 and will be effective at the beginning of 2026.
However, the IRA’s price negotiation element is facing court challenges from leading drugmakers and industry groups, including Merck & Co, Bristol Myers Squibb, Johnson & Johnson, Boehringer Ingelheim and the Pharmaceutical Research and Manufacturers of America.
Many of the lawsuits claim the plan is unconstitutional and argue that there is no negotiation, but rather compulsory price-setting backed by punitive fines for non-compliance.
AstraZeneca became the latest to file a complaint challenging Medicare’s right to negotiate prices just last week, with the Anglo-Swedish drugmaker arguing that the IRA’s drug price negotiation provisions undermine the goals of the Orphan Drug Act, a federal statute designed to encourage manufacturers to invest in new therapies for rare diseases.