Earlier this month, the United States government stated that they aim to save taxpayers around $6 billion on the prices for 10 widely used prescription drugs under its new authority to leverage Medicare’s market power as well as reduce the cost of brand-name medicines.
The prices, which are associated with two popular blood thinners, several diabetes treatments and a cancer pill, won’t be active until 2026, but it marks an important step in the long road for the Inflation Reduction Act.
The Inflation Reduction Act for the first time has allowed the U.S. government to directly negotiate the prices of select drugs under the agency’s purview.
“Today, for the first time in history, my Administration is announcing that Medicare has reached agreements on new, lower prices with the manufacturers of all 10 drugs selected for the first round of drug price negotiation. When these lower prices go into effect, people on Medicare will save $1.5 billion in out-of-pocket costs for their prescription drugs and Medicare will save $6 billion in the first year alone. It’s a relief for the millions of seniors that take these drugs to treat everything from heart failure, blood clots, diabetes, arthritis, Crohn’s disease, and more — and it’s a relief for American taxpayers,” President Joe Biden said in an official statement.
The CMS reported that negotiated prices for the 10 drugs range from 38% to 79% lower, on average from the medication’s current wholesale cost and/or list price set by the suppliers and drugmakers.
The new rates could save Medicare enrollees an estimated $1.5 billion in out of pocket costs, according to CMS, which is required to publish an explanation for the prices it reached on the first 10 drugs by March 1, 2025.
“Now that we have seen the final price, we are increasingly confident in our ability to navigate the impact of the IRA on Eliquis,” David Elkins, chief financial officer of Eliquis maker Bristol Myers Squibb said during a call with investors back on July 26th (h/t Healthcare Dive). “Irrespective of short-term dynamics, we remain very concerned about the long-term implications of the IRA on innovation.”
Per Healthcare Dive:
Sales, pricing data on IRA selected drugs
| Drug | Manufacturer | 2023 U.S. sales, $m | List price, 30 day supply (2023)* | Negotiated price, 30 day supply (2026)* |
|---|---|---|---|---|
| Eliquis | Bristol Myers, Pfizer | $8,592 | $521 | $231 |
| Jardiance | Eli Lilly, Boehringer Ingelheim | $1,600* | $573 | $197 |
| Xarelto | J&J, Bayer | $2,365** | $517 | $197 |
| Januvia | Merck & Co. | $1,151 | $527 | $113 |
| Farxiga | AstraZeneca | $1,451 | $556 | $178.50 |
| Entresto | Novartis | $3,067 | $628 | $295 |
| Enbrel | Amgen | $3,650 | $7,106 | $2,355 |
| Imbruvica | AbbVie, J&J | $2,655*** | $14,934 | $9,319 |
| Stelara | J&J | $6,966 | $13,836 | $4,695 |
| Fiasp / Novolog | Novo Nordisk | $674 | $495 | $119 |
*Reported by the Centers for Medicare and Medicaid Services | U.S. sales are as reported by the company and inclusive of commercial prescriptions.
