The Biden administration has selected 10 drugs for the first round of price negotiations between Medicare and pharmaceutical companies in an effort to lower costs for seniors, it announced on Tuesday.
The list of prescription drugs includes blood thinners and treatments for diabetes, as well as drugs used to treat kidney disease, heart failure and arthritis. Millions of older Americans depend on these drugs – many taken daily – each year, and the negotiations are intended to reduce the financial burden for Medicare beneficiaries.
“When implemented, prices on negotiated drugs will decrease for up to 9 million seniors. These seniors currently pay up to $6,497 in out-of-pocket costs per year for these prescriptions,” Joe Biden said in a statement on Tuesday.
But the negotiations have been met with opposition from the pharmaceutical industry, saying they are unconstitutional.
A handful of the most powerful and profitable drugmakers are suing the Biden administration over the cost-reduction program, which was installed through the Inflation Reduction Act (IRA) and gives Medicare the power to negotiate drug prices.
The pharmaceutical giant Merck, maker of Januvia, a prescription pill that helps lower blood sugar in adult patients with type 2 diabetes, became the first to sue the US Department of Health and Human Services (HHS) over the program in June. Merck said the negotiation program violates the first and fifth amendments to the US constitution, saying the administration was forcing companies to “legitimize government extortion” by forcing them to agree to prices dictated by HHS, according to a complaint filed in a DC federal court.
“Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred,” said the HHS secretary, Xavier Becerra, in a press release on Tuesday.
The maker of the widely used blood thinner Eliquis, Bristol Myers Squibb, also sued the Biden administration in June over the program for violating the first and fifth amendments. The company also called the program “bad for innovation”, arguing that it stunts the pharmaceutical industry’s ability to develop new treatments.
According to the Centers for Medicare & Medicaid Services (CMS), the federal agency that administers the Medicare insurance program, seniors paid $3.4bn for the 10 drugs in 2022.
Six of the drugmakers on the list are independently suing the Biden administration over the program, according to a count by the Guardian. And seven of the drugs have at least one manufacturer that has independently filed a lawsuit.
Yet nearly all of the manufacturers are members of the largest pharmaceutical lobbying group, Pharmaceutical Research and Manufacturers of America (PhRMA), which along with two other organizations is suing the Biden administration over Medicare’s negotiation powers.
Negotiations for the 10 drugs will begin this fall and are expected to be finalized by August 2024, according to a plan by the CMS. The new prices would take effect in 2026.
The Biden administration also said it plans to expand Medicare negotiations for 60 drugs over the next four years.
