These 10 prescription drugs could have lower prices through Medicare
- The Inflation Reduction Act allows the federal government to select several drugs that will undergo price negotiations
- Medicare will begin negotiating prices for 10 prescription drugs. The new price will go into effect in 2026
- Companies have until the beginning of October to decide if they will negotiate prices and provide data, or opt out and face heavy tax penalties
Medicines that treat everything from diabetes and heart failure to blood cancer and colitis are among the 10 prescription drugs that Medicare seeks to begin negotiations with to reduce prices.
The Centers for Medicare and Medicaid Services made the announcement this week, taking advantage of a clause in the Inflation Reduction Act that allows Medicare to negotiate the prices of some drugs that don’t have a generic or similar alternative.
The new prices would be effective by 2026.
The list of drugs include:
- Eliquis, which treats blood clots
- Jardiance, which treats diabetes and heart failure
- Xarelto, which reduces the risk of stroke
- Januvia, which treats diabetes
- Farxiga, treats diabetes, heart failure and kidney disease
- Entresto, which treats heart failure
- Enbrel, which treats rheumatoid arthritis psoriasis and psoriatic arthritis
- Imbruvica, which treats blood cancers
- Stelara, which treats psoriasis psoriatic arthritis Crohn’s
- Fiasp, which treats diabetes
The retail price for many of the drugs is $200 to $500 per month, and out-of-pocket spending for the most expensive drugs is more than $6,000 per year per Medicare recipient.
- Over 80,000 Michigan residents lost Medicaid benefits in first month
- RSV vaccine available for older Michiganders, but many don’t know of it
- Michigan hopes reforms pump life into lagging state organ donor registry
The 10 drugs comprise $50.5 billion — 20 percent — of Medicare spending for Part D drugs from June 1, 2022, and May 31, 2023, according to a report by CMS.
Part D drugs are most often prescribed by private companies and can be taken at home, opposed to Part B drugs, including vaccines, injections and nebulizers, which are typically administered by a health care provider.
NBC News reported that nearly 10 percent of Medicare beneficiaries have heart conditions that put them at risk for blood clots. About 28 percent of beneficiaries have diabetes, 27 percent have coronary heart disease and 15 percent have heart failure. About 25 percent have chronic kidney disease.
The cost of prescription drugs remains a huge concern for older residents, experts say.
“Unfortunately, too many people are coping with it by either ignoring their prescription altogether and not taking the drugs that they're supposed to be taking or really cutting down,” said Brian Peters, chief executive officer for the Michigan Health and Hospital Association.
Many people are taking one pill every other day, opposed to one pill every day as prescribed, to make the medication stretch which, “is not an appropriate way to deal with this problem,” he added.
Dr. J. Younes, an allergy specialist in Lake Orion, said he asked a drug company to provide him with sample medication to treat a Medicare patient who was taking medication every other month rather than twice a month as prescribed.
“You don't go to medical school just spend your day figuring out prices of drugs,” he said.
Pharmaceutical companies continue to make billions of dollars each year. In 2021 the global pharmaceutical market made over $1.48 trillion slightly more in 2021, when profits reached $1.42 trillion.
“The majority of individuals that are receiving Medicare are on a fixed income, so any time these manufacturers decide to increase their prices without prior notice, it really puts a strain on many of these individuals' pocketbooks,” said Melissa Seifert, associate state director for governmental affairs, for the Michigan branch of the AARP.
Drug companies have until Oct. 1 to decide if they will enter negotiations and until Oct. 2 to submit data to CMS, who will use that information to determine a fair price.
CMS will meet with the companies during the fall and send proposed prices for the drugs by Feb. 1, 2024. The companies will have 30 days to either accept or counteroffer the new price.
If a negotiation on a maximum fair price isn’t reached by the initial offer or counteroffer, CMS will have three meetings before the negotiation period ends on Aug. 1, 2024.
Drug companies that don’t participate in the negotiations may face tax penalties that start at 65 percent of U.S. sales and increase 10 percent per quarter to 95 percent.
The tax could be lifted if the company pulls the medicine from Medicare, which would no longer give them access to the 65 million people enrolled in the program.
Price negotiations will continue in the coming years. The Inflation Reduction Act allows the federal government to select 15 more drugs in 2027 and 2028 and 20 more drugs for each year after.
See what new members are saying about why they donated to Bridge Michigan:
- “In order for this information to be accurate and unbiased it must be underwritten by its readers, not by special interests.” - Larry S.
- “Not many other media sources report on the topics Bridge does.” - Susan B.
- “Your journalism is outstanding and rare these days.” - Mark S.
If you want to ensure the future of nonpartisan, nonprofit Michigan journalism, please become a member today. You, too, will be asked why you donated and maybe we'll feature your quote next time!