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In the latest episode of the fight to control health care costs in the country, President Joe Biden’s administration unveiled Tuesday the names of the first 10 drugs subject to price negotiations in Medicare, including blood thinners and diabetes medications.
The medications treat heart disease, certain cancers, diabetes and autoimmune diseases — and were used by approximately 9 million Medicare recipients, who paid a total of $3.4 billion in out-of-pocket costs last year, according to the Department of Health and Human Services.
First, the medications:
- Eliquis (Bristol Myers Squibb);
- Jardiance (Boehringer Ingelheim);
- Xarelto (Bayer);
- Januvia (Merck);
- Farxiga (AstraZeneca);
- Entresto (Novartis);
- Enbrel (Immunex – Amgen);
- Imbruvica (AbbVie)
- Stelara (Janssen);
- Fiasp (Novo Nordisk).
These drugs accounted for more than $50 billion (or roughly 20%) of Part D gross covered prescription drug costs, between June 1, 2022, and May 31, which is the period used to determine which drugs were eligible for negotiation, according to HHS.
The Centers for Medicare & Medicaid Services now will negotiate lower prices, using its new authorities under the Inflation Reduction Act.
The negotiated prices will take effect in 2026. If drugmakers don’t comply with the process, they will have to pay an excise tax of up to 95% of the medications’ U.S. sales or pull all their products from the Medicare and Medicaid markets.
Pulling out of the process may prove difficult. An additional 15 drugs will be added to the list for 2027 and again for 2028. The number rises to 20 drugs for each year after that.
The announcement — as with anything involving health care costs — was met with a mixed response.
U.S. Rep. Frank Pallone (D-6th Dist.) applauded the announcement.
“This is a historic day for health care in America,” he said. “For the first time in the Medicare program, we are going to negotiate the price of prescription drugs for America’s seniors.
“Other nations around the world negotiate prescription drug prices, and it is only fair that we do the same. Today’s announcement begins the process of Medicare negotiating lower prices on these 10 drugs and making them more affordable for America’s seniors. It marks the end of a 20-year handout from Republicans in Congress to the pharmaceutical industry that prevented Medicare from negotiating prescription drug prices for seniors.”
Dean Paranicas, the CEO of the HealthCare Institute of New Jersey, stressed caution and concern. As is often the case, the pharma industry maintains the costs of the drugs is necessary for the research & development necessary to discover the next blockbuster.
“We remain firmly committed to working with policymakers on finding ways to lower health care costs for patients, but not by jeopardizing future treatments and cures for disease states like Alzheimer’s, HIV/AIDS, diabetes, rare diseases, cancer and other life-threatening illnesses,” he said.
“Government price controls decimate the innovation ecosystem that continues advancing global human health and which, most recently, discovered a cure for hepatitis C, vaccines against cervical cancer, the first-ever treatment for Alzheimer’s and vaccines and treatments against new threats such as COVID-19.
“We will continue working with all stakeholders — including patient groups desperately awaiting the discovery of new treatments and cures — on policies that protect both the patient community and medical innovation.”
Where does it go from here?
Where it always goes: This program already is in court — and figures to be there for many years.
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