Anticipated this week is the revelation of the ten most prominent prescription drugs that will undergo federal negotiations as part of a novel federal statute, intended to curtail the expense associated with the priciest drugs within the Medicare framework.
The Inflation Cut Act, a comprehensive legislation embracing both environmental and healthcare dimensions, enacted by Congress last year, has empowered the federal administration to engage in price negotiations for medications designed for elderly Americans—an unprecedented milestone. The Centers for Medicare and Medicaid Services holds a deadline until Friday to disclose the roster of the ten drugs earmarked for negotiation. However, insiders indicate that the announcement could manifest earlier in the week.
With resolute aspirations to mitigate drug costs for Medicare beneficiaries and taxpayers, consumer advocates and senior proponents have long championed this endeavor.
Historically, the health plan directed towards individuals aged 65 and older, as well as those afflicted with disabilities, prescribes reimbursement rates for medical services dispensed by physicians and hospitals. Yet, the ability of Medicare to engage in discussions regarding pharmaceutical prices had, until now, been proscribed—a consequence of the 2003 legislation that delineated Medicare’s prescription drug coverage.
Preliminary scrutiny points towards costly and widely utilized drugs tailored for conditions such as arthritis, cancer, diabetes, and heart ailments as plausible focal points of these negotiations. The recalibration of pricing for the initial set of ten drugs is slated to actualize in 2026. Subsequently, over the course of 2027 and 2028, another thirty drugs are earmarked for the integration of negotiated pricing mechanisms.
“The negotiation process will aptly achieve its objective by encompassing drugs extensively used, exorbitantly priced, or those that encompass both these attributes,” articulated Leigh Purvis, the Director of Prescription Drug Policy at the AARP Public Policy Institute.
The pharmaceutical sector, however, contests the prospect of drug negotiations. A consortium of legal challenges, comprising eight lawsuits orchestrated by Big Pharma and its cohorts, seeks to halt these deliberations. Noteworthy pharmaceutical entities like AstraZeneca, Astellas Pharma, Bristol Myers Squibb, Johnson & Johnson, Merck, alongside the pharmaceutical industry’s representative trade body PhRMA, in conjunction with the U.S., Michigan, and The Ohio Chamber of Commerce, have all mounted legal opposition.
These lawsuits pivot around a distinctive legal proposition, contending that the stipulations governing drug negotiations, as encapsulated within the Inflation Reduction Act, precipitate a contradiction with another federal statute—the Orphan Drug Act—intended to foster investments in novel therapies addressing rare ailments. AstraZeneca, in a lawsuit instituted in the U.S. District Court for the District of Delaware, asserted that the drug negotiation clauses of the Inflation Reduction Act are incongruous with the principles of the Orphan Drug Act, which incentivizes pharmaceutical innovation for obscure maladies.
Dave Fredrickson, the Executive Vice-President of Oncology at AstraZeneca, postulated that the progression of drug negotiations could impede scientific advancements for U.S. patients in relation to their global counterparts.
Kelly Bagby, the Vice President of Litigation at the AARP Foundation, noted the burgeoning litigious endeavors initiated across various jurisdictions might be part of a concerted strategy to propel these cases to the U.S. Supreme Court. Bagby elucidated, “Their strategic objective appears to expedite the momentum in a bid to reach the Supreme Court at the earliest juncture.”
For seniors dependent on costly prescription drugs, the anticipation swells to discern the roster of negotiable drugs that could potentially entail discounts.
Ellen Farmer, a 64-year-old resident of Massachusetts, relies on Xarelto to manage a form of irregular heartbeat termed atrial fibrillation. Adhering to her physician’s counsel, she commenced blood-thinning therapy to mitigate the risk of blood clots, heart attacks, or strokes.
“My astonishment and trepidation knew no bounds when the pharmacist apprised me that the monthly deductible for Xarelto (post-insurance) amounted to $1,000,” Farmer recounted. “This is simply beyond my means.”
Farmer found herself enrolled in Medicare following a debilitating heart attack, rendering her eligible for a subsidy catering to low-income Medicare beneficiaries—an intervention that materially alleviated her monthly drug-related expenditures.
