On Tuesday, US Pres. Joe Biden's administration released its list of the first 10 prescription medicines that will enter the first-ever price negotiations between the nation's Medicare program and Big Pharma.
On Tuesday, US Pres. Joe Biden's administration released its list of the first 10 prescription medicines that will enter the first-ever price negotiations between the nation's Medicare program and Big Pharma.1
Biden's Inflation Reduction Act (IRA) allows the US government to negotiate drug prices through the Medicare program. Historically, pharmaceutical companies have been unregulated in the price they could charge for life-saving medications.2
The drugs selected include Bristol-Myers Squibb's Eliquis, a medication that reduces stroke risk; AstraZeneca's Farxiga, a drug used for Type 2 diabetes treatment; Novo Nordisk's insulins, Fiasp and NovoLog; and Entresto, Novartis' drug for the treatment of heart failure; among others.3
According to the Centers for Medicare and Medicaid Services (CMS), the 10 named drugs are among the costliest under Medicare Part D — which is made up of prescription medications filled by seniors at retail pharmacies — with the listed drugs making up 20% of its costs from June 1, 2022, to May 31, 2023.3
The pharmaceutical companies behind the drugs selected will have to sign on to negotiation agreements by Oct. 1, and negotiations will conclude by the end of August 2024.3
If a company decides to forego negotiations, it could face a tax penalty resulting in up to 95% of the drug's US sales.4
Democratic narrative, as provided by Center for American Progress. Republicans have led an unconscionable effort to deny Medicare the right to negotiate drug prices. Pres. Biden stepped in with the Inflation Reduction Act, which will not only help millions of elderly and marginalized Americans afford crucial medicines but will also decrease the federal deficit for years to come. This is a win for everyone.
Republican narrative, as provided by Federalist. The only thing this provision will achieve is years of litigation as companies rightfully defend themselves against this attack. This development will force drug makers to decide between earning enough in sales to fund their research, development, and operations and investing in new cutting-edge life-saving drugs, as the government threatens them with financial ruin if they don't comply.