The Biden administration released its list of 10 drugs for direct price negotiations with manufacturers. The highly anticipated list is the most recent step in enacting a part of the Inflation Reduction Act (IRA) of 2022. The drugs listed are largely treatments related to Type 2 diabetes, blood thinning, arthritis and cancer treatments.
Diabetes treatments Jardiance, produced by Eli Lilly and Co. and Januvia, which is produced by Merck, both address conditions related to Type 2 diabetes and made the list, according to a press release by the U.S. Department of Health and Human Services. Additionally, Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, and Novolog PenFill are all insulin aspart injection drugs. Over a quarter of Medicare beneficiaries have diabetes, and nearly 10% of beneficiaries have reported not filling a prescription or skipping a drug dose due to issues with cost.
Modern Healthcare reports that the drug price negotiation program intends to directly lower costs while allowing drugmakers to sell their products to consumers, but drug companies that refuse to participate will be met with tax penalties. Although the rule has already been countered with a number of high profile legal challenges, should the drug list make it to negotiation, the Medicare program could benefit to the tune of billions of dollars should the rule be finalized.
American’s overwhelmingly support lowering prescription drug prices. According to a survey from West Health and Gallup, 83% of Americans still support the drug price negotiation program. From Tim Lash, president of West Health:
No matter who they vote for, American are suffering from the high costs of prescription drugs. The public’s overwhelming support for this policy, even as we head into a presidential election, makes one thing exceedingly clear: people know unfair, anticompetitive behavior when they see it and they want it to stop.
Should the rule escape legal challenge or stay, the Centers for Medicare and Medicaid Services (CMS) will negotiate the new maximum fair price for the selected drugs between October 1, 2023 and August 1, 2024. Inside Health Policy explains that the maximum fair prices will be announced the following month and will take effect as of January 1, 2026.