The Centers for Medicare and Medicaid Services (CMS) released the final prices of the first 10 drugs selected for negotiation under the Inflation Reduction Act (IRA) on Thursday morning.
Discounts achieved by CMS for the Medicare-negotiated prices compared to the 2023 list prices range from 79% for Merck’s diabetes medication Januvia to 38% for Amgen’s blood cancer drug Imbruvica.
Four of the 10 drugs selected for negotiation were diabetes drugs, while others treat blood clots, heart failure, rheumatoid arthritis and blood cancers.
Below is a list of the negotiated drugs, the negotiated prices for a 30-day supply, the discount achieved, the total Medicare Part D gross covered prescription drug costs from last year and the number of enrollees who used the drug.
- Merck’s Januvia: $113; 79%; $4.09 billion and 843,000 enrollees.
- Novo Nordisk’s Fiasp, NovoLog and FlexPen: $119; 76%; $2.6 billion and 785,000 enrollees.
- AstraZeneca’s Farxiga: $178.50; 68%; $4.3 billion; 994,000 enrollees.
- Amgen’s Enbrel: $2,355; 67%; $2.9 billion; 48,000 enrollees.
- Boehringer Ingelheim’s Jardiance: $197; 66%; $8.8 billion; 1.8 million enrollees.
- Johnson & Johnson’s Stelara: $4,695; 66%; $2.9 billion; 23,000 enrollees.
- Bayer’s Xarelto: $197; 62%; $6.3 billion; 1.3 million enrollees.
- Bristol Myers Squibb’s Eliquis: $231; 56%; $18.2 billion; 3.9 million enrollees.
- Novartis’ Entresto: $295; 53%; $3.4 billion; 664,000 enrollees.
- Merck’s Imbruvica: $9,319; 38%; $2.3 billion; 17,000 enrollees.
Important to note, the negotiated prices will go into effect on January 1, 2026.
Department of Health and Human Services Secretary Xavier Becerra said in a press release that the first 10 drug prices negotiated under the IRA would save Medicare $6 billion during the first year. Had the program been in place during 2023, that would have resulted in 22% lower net spending on prescription drugs in the aggregate, according to the Biden administration.
He added that it would save another $1.5 billion for Americans who pay out of pocket moving forward.
“Americans pay too much for their prescription drugs. That makes today’s announcement historic. For the first time ever, Medicare negotiated directly with drug companies and the American people are better off for it,” Becerra stated. “ Empowering Medicare to negotiate prices not only strengthens the program for generations to come, but also puts a check on skyrocketing drug prices.”
CMS Administrator Chiquita Brooks-LaSure, a 2024 MM+M Health Influencer, added that the Medicare drug price negotiations fulfill a commitment from the “Biden-Harris administration” to lower prescription drug costs.
Much-anticipated pricing announcement
The highly-anticipated announcement came just over two years after the IRA was signed into law. One of the most significant provisions of the bipartisan legislative package was that Medicare could directly negotiate the prices of 10 prescription drugs.
Looking back on the timeline, the Biden administration announced the 10 prescription drugs selected for Medicare price negotiations in August 2023. By the fall, the drugmakers had agreed to negotiate the prices of the selected medications.
Negotiations began in early February, when CMS sent out its initial price offers. Ahead of an August 1 deadline, the federal government engaged in negotiations with drugmakers to achieve a “maximum fair price.”
In March, the drugmakers responded to the initial offers with their respective counteroffers. By mid-July, CMS sent final offers to drugmakers that had not already agreed to a negotiated price.
This process marked one of the most meaningful pieces of drug pricing reform enacted in decades and pitted drugmakers against CMS in the courts.
AstraZeneca, Bristol Myers Squibb, Boehringer Ingelheim, Merck, Novo Nordisk, Janssen Pharmaceuticals and Novartis were among the companies that negotiated with CMS and also sued the Biden administration over the IRA.
In addition to the drug manufacturers, the U.S. Chamber of Commerce and industry trade group PhRMA also sued the administration over the legislation, but all legal challenges have failed thus far.
In the hours since the negotiated prices were made public, the news has had little effect on the stock prices of the participating drugmakers.
During earnings calls over the past few weeks, executives at these companies largely cautioned investors that there would be an impact from the IRA — albeit a manageable one — on the bottom line.
To read an article on what the final Medicare-negotiated prices mean for pharma’s future, click here.
