Healthcare, health insurance and Medicare are hot topics and controversial topics at times too. Developments in this sector naturally impact our well-being and they also have a major effect on the economy and political circles.
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Some early signs of how Medicare will handle drug price negotiations: Officials plan to announce the initial group of drugs later this year, the first 10 of 140 drugs for which the Centers for Medicare & Medicaid Services (CMS) will be able to negotiate the price by 2033.
This will give manufacturers time to prepare for talks, which will start for Medicare Part D drugs in 2026 and 2027.
Among the factors that CMS will consider in valuing a drug:
- Clinical benefits
- The net price of alternatives
- Research costs
- Revenue
- Patent protections and
- Federal funding
The industry is warning about lower investment in certain kinds of drugs, namely small-molecule drugs, which are exempt from negotiations for seven years after approval by the Food and Drug Administration (FDA) vs. 11 years for large-molecule drugs or biologics. Small-molecule drugs are manufactured via chemical synthesis and include things like aspirin and other “medicine cabinet” pharmaceuticals.
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