Medicare’s Price Negotiations: Biden Administration Aims To Reduce Healthcare Costs For U.S. Citizens

(CTN NEWS) – The Biden administration has set its sights on introducing drug price negotiations for Medicare, marking a significant step towards reducing healthcare expenses for the American population.

In a groundbreaking move, the administration unveiled a roster of ten medications, including the blood thinner Eliquis and diabetes management drug Jardiance, which will be subject to direct price negotiations with their manufacturers.

While this approach is anticipated to yield cost reductions for certain patients over the coming years, it is not without its challenges.

Pharmaceutical companies are likely to contest these negotiations in court, and Republican lawmakers have raised strong objections, criticizing the initiative.

This strategy also takes center stage in the Democratic president’s bid for re-election, as he emphasizes his endeavors to alleviate the financial burden on Americans during a period of inflationary pressures.

The list of drugs undergoing this negotiation process encompasses diverse treatments, such as Eli Lilly and Co.’s diabetes medication Jardiance, Merck’s Januvia, Amgen’s Enbrel for autoimmune diseases, and Novartis’ Entresto, a treatment for heart failure.

Biden Vows to Tackle Healthcare Costs: Focus on Negotiating Drug Prices

“For many Americans, the cost of a single medication can determine the line between life and death, dignity and dependence, hope and fear,” stated Biden in a released statement. He emphasized the administration’s unyielding commitment to reducing healthcare expenses and expressed determination to persevere until the goal is achieved.

Later on Tuesday, Biden is scheduled to address the issue of healthcare costs from the White House, and this announcement will be accompanied by Vice President Kamala Harris.

The medications listed on Tuesday collectively accounted for over $50 billion in Medicare prescription drug costs from June 1, 2022, to May 31, as reported by the Centers for Medicare and Medicaid Services (CMS).

Notably, in 2020, Medicare spent around $10 billion on Eliquis, a blood clot medication produced by Pfizer and Bristol-Myers Squibb.

This drug treats blood clot issues in the legs and lungs while also reducing the risk of stroke in individuals with atrial fibrillation, an irregular heartbeat condition.

Senior officials from the administration indicated that the chosen ten drugs for negotiation were among those that burdened the Medicare program the most. Approximately 8.2 million beneficiaries with Medicare Part D prescription drug coverage are currently prescribed these medications.

Among the medications on the list are AstraZeneca’s Farxiga, used for diabetes and heart failure treatment, and three drugs from Johnson & Johnson: the blood thinner Xarelto, the blood cancer treatment Imbruvica, and Stelara, a top-selling intravenous treatment for psoriasis and inflammatory disorders.

The roster also incorporates various versions of Novo Nordisk’s Fiasp, a fast-acting insulin taken around meal times.

Inflation Reduction Act Fuels Bold Step: Biden Administration Advances Drug Pricing Negotiations

Under the Inflation Reduction Act, signed by Biden the previous year, this announcement marks a significant stride forward.

This legislation mandates the federal government’s direct engagement in negotiations with companies regarding the pricing of some of Medicare’s costliest drugs.

With more than 52 million individuals aged 65 and older, or with certain severe disabilities or illnesses, benefiting from Medicare’s Part D prescription drug coverage, the initiative holds considerable relevance.

Statistics from 2021 research conducted by the Commonwealth Fund, an organization focusing on healthcare matters, reveal that around 9% of Medicare beneficiaries aged 65 and older opted not to fill a prescription or skipped medication doses due to financial constraints.

The ultimate objective of the agency is to establish the lowest possible maximum fair price for the drugs listed on Tuesday.

This approach could prove beneficial for individuals with coverage who still encounter substantial expenses like high deductible payments when purchasing prescriptions.

Presently, pharmacy benefit managers overseeing Medicare prescription plans negotiate rebates to reduce drug prices. However, these rebates may not directly impact what patients pay at the pharmacy counter.

The new approach to drug price negotiations aims to strike a balance between enhanced affordability and the maintenance of profit margins for drug manufacturers, as stated by Gretchen Jacobson, a researcher specializing in Medicare matters at the Commonwealth Fund.

Companies that decline to participate in the new negotiation process will face significant taxation.

The pharmaceutical industry has been preparing for several months to challenge these regulations.

The plan is already facing multiple lawsuits, including complaints from drug giants Merck and Bristol-Myers Squibb, along with the influential lobbying group Pharmaceutical Research and Manufacturers of America (PhRMA).

PhRMA Challenges Act in Court, Concerns Mount Over Access and Innovation

PhRMA, in a complaint filed in federal court earlier in the year, argued that the act forces drug companies to accept a “government-dictated price” under the threat of heavy taxes, and it grants excessive price-setting authority to the U.S. Department of Health and Human Services.

PhRMA representatives have also pointed out that pharmacy benefit managers could still limit access to drugs with negotiated prices by shifting those drugs to higher-cost tiers in their formularies.

They might also require patients to try alternative drugs first or seek prior approval before covering a prescription.

Republican lawmakers have also criticized the Biden administration’s plan, expressing concerns that companies might become hesitant to introduce new drugs that could later be subjected to negotiation.

They’ve questioned the government’s ability to accurately suggest drug prices.

The CMS intends to initiate negotiations with the drugs that incur the highest expenses. The chosen drugs must lack generic counterparts and have received approval from the Food and Drug Administration (FDA).

In the upcoming fall, CMS is slated to meet with drug manufacturers whose drugs are listed, and the government plans to organize patient-focused listening sessions as well. By February 2024, the government will present its initial offer for a maximum fair price and provide drugmakers with an opportunity to respond.

The negotiated prices won’t take effect until 2026. Additional drugs may be included in the program in the ensuing years.

RELATED CTN NEWS:

[WATCH] Fatal Helicopter Crash At Pompano Beach Apartment Complex Leaves 2 Dead, 4 Injured

Russian President Putin To Miss G20 Summit In India, Foreign Minister To Attend Instead

WHO Extends Travel Restrictions For Pakistan By Three Months Amid Ongoing Polio Risk