Summary: The first ten drugs have been selected for Medicare price negotiations under the Inflation Reduction Act. Price negotiations for these drugs will occur through 2023 and 2024, with any negotiated prices going into effect in 2026. Estimated Read Time: 5 min
Table of Contents:
- What is the Medicare Drug Price Negotiation Program?
- Which Drugs Have Been Selected for Price Negotiations?
- Which Factors Did CMS Consider When Choosing Those Drugs?
- When Will Negotiated Prices Go Into Effect?
- What’s Next for Medicare Price Negotiations?
The Inflation Reduction Act of 2022 gave the secretary of the U.S. Department of Health and Human Resources the authority to negotiate Medicare drug prices with participating manufacturers. In the past, Medicare could not negotiate costs with pharmaceutical companies due to the Medicare Modernization Act of 2003.
With about 53 million Americans enrolled in a Medicare Part D Prescription Drug plan, negotiating lower prices for high-cost drugs can significantly impact making sure people can get the treatments they need.
The first ten drugs covered under Medicare Part D have been chosen for negotiations to lower prices for Medicare enrollees. These drugs treat severe health conditions such as blood clots, diabetes, heart failure, and chronic kidney disease.
According to data from the U.S. Department of Health and Human Resources, about 9 million Medicare Part D enrollees in 2022 used the drugs selected for price negotiations.
|Drug Name||Drug Manufacturer||Commonly Treated Condition|
|Eliquis||Bristol-Myers Squibb||Prevention and treatment of blood clots|
|Jardiance||Boehringer Ingelheim||Diabetes; Heart failure|
|Xarelto||Johnson & Johnson||Prevention and treatment of blood clots|
|Farxiga||AstraZeneca||Diabetes; Heart failure; Chronic kidney disease|
|Enbrel||Amgen||Rheumatoid arthritis; Psoriasis; Psoriatic arthritis|
|Stelara||Janssen||Psoriasis; Psoriatic arthritis; Crohn’s disease; Ulcerative colitis|
|Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill||Novo Nordisk||Diabetes|
According to the Centers for Medicare and Medicaid Services, these ten drugs accounted for $50.5 billion, or 20%, of total Medicare Part D gross covered prescription drug costs from June 1, 2022 to May 31, 2023.
In 2022, Medicare Part D enrollees spent $3.4 billion in out-of-pocket costs on the above drugs. The average annual out-of-pocket spending in 2022 (for enrollees without financial assistance) ranged from a high of $6,497 per enrollee taking Imbruvica to a low of $261 per enrollee taking NovoLog.
Of the ten drugs selected for price negotiations, Eliquis is the most widely used drug among Medicare Part D enrollees. Over 3.7 million enrollees used Eliquis between June 2022 and May 2023, costing Medicare around $16.5 billion.
If the above drugs can be negotiated down in price, not only will the Medicare program itself see a reduction in spending, but enrollees will be paying less out-of-pocket. Price negotiations are an opportunity for people with Medicare to have access to life-saving treatments at a lower cost.
CMS followed the guidelines specified in the Inflation Reduction Act when selecting the drugs for the first round of price negotiations.
The first thing CMS considers is which qualifying drugs are single-source drugs. Single-source drugs have been FDA-approved and on the market for at least seven or 11 years for biologics (like vaccines), without generic or biosimilar competitors.
CMS also considered which drugs had the highest total covered costs under Medicare Part D. This data was collected from June 1, 2022, through May 31, 2023.
|Drug Name||Medicare Part D Total Gross Covered Prescription Drug Cost (June 2022 – May 223)||Medicare Part D Enrollees Who Used the Drug (June 2022 – May 2023)||Average Annual Out-of-Pocket Spending per Enrollee (for 2022)|
|Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill||$2,576,586,000||777,000||$121|
Price negotiations for the above ten drugs will be conducted in 2023 and 2024. CMS and drug manufacturers will engage in an offer and counteroffer process during the negotiations. The negotiation period will conclude on August 1, 2024. CMS will publish all negotiated prices for the selected drugs by September 1, 2024, and the new pricing will take effect on January 1, 2026.
The Centers for Medicare and Medicaid Services (CMS) have a set process for negotiations with drug manufacturers, which includes engagement with the public. Patients, beneficiaries, caregivers, and other interested parties can share their input on the selected drugs during the first round of negotiations.
If you’re interested in listening in or contributing to a patient-focused Listening Session, you can visit CMS.gov for more information. The preliminary schedule for Listening Sessions for the selected drugs are as follows:
- Eliquis: Monday, October 30, 2023 at 12:00 – 1:30 PM EST
- Enbrel: Tuesday, October 31, 2023 at 12:00 – 1:30 PM EST
- Entresto: Wednesday, November 1, 2023 at 12:00 – 1:30 PM EST
- Farxiga: Thursday, November 2, 2023 at 12:00 – 1:30 PM EST
- Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill: Friday, November 3, 2023 at 12:00 – 1:30 PM EST
- Imbruvica: Monday, November 6, 2023 at 12:00 – 1:30 PM EST
- Januvia: Tuesday, November 7, 2023 at 12:00 – 1:30 PM EST
- Jardiance: Wednesday, November 8, 2023 at 12:00 – 1:30 PM EST
- Stelara: Tuesday, November 14, 2023 at 12:00 – 1:30 PM EST
- Xarelto: Wednesday, November 15, 2023 at 2:00 – 3:30 PM EST
If you would like to speak at any of the above Listening Sessions, make sure you register for a chance to speak. You can do so on the Centers for Medicare and Medicaid Services official website.
Following the first round of Medicare drug price negotiations, CMS will begin the process of selecting up to 15 more Medicare Part D drugs to be lowered for 2027. Followed by up to 15 more for 2028, including medications covered under Medicare Part B and Part D. The number of drugs being negotiated will increase up to 20 for every year after 2028.
In addition to Medicare drug price negotiations, other changes are coming to Medicare Part D as a result of the Inflation Reduction Act. 2024 Medicare Part D changes include making insulin more affordable for Medicare enrollees, eliminating the 5% coinsurance during the catastrophic coverage phase, and expanding Extra Help.
For help with your Medicare Part D prescription drug coverage, we have licensed agents ready to help! Give us a call at the number above or complete our online rate form for more information regarding your drug coverage for the upcoming year.
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- Statements by CMS Leadership on Historic Announcement of First Selected Drugs for Medicare Drug Price Negotiation. Accessed August 2023.
- FACT SHEET: Biden-Harris Administration Announces First Ten Drugs Selected for Medicare Price Negotiation. Accessed August 2023.
- HHS Selects the First Drugs for Medicare Drug Price Negotiation. Accessed August 2023.
- Inflation Reduction Act Research Series— Medicare Enrollees’ Use and Out-of-Pocket Expenditures for Drugs Selected for Negotiation Under the Medicare Drug Price Negotiation Program. Accessed August 2023.