Joe Biden is preparing to launch one of his presidency’s most its provisions if they get enough power in Washington. Also among the detractors is the pharmaceutical industry, which has launched lawsuits challenging the constitutionality of the negotiation process. Those cases are still in front of the courts.
“The government’s arbitrary process for deciding the price of medicines will drive research and investment away from potentially lifesaving treatment options for Medicare patients,” Nicole Longo, senior director for public affairs at the Pharmaceutical Research and Manufacturers of America trade group, wrote in a blog item Monday.
However valid the competing claims about price negotiation, and whatever its trade-offs, the first step is the naming of those first 10 drugs ― which, according to the Inflation Reduction Act, must happen by this coming Friday, Sept. 1.
An Announcement And Then A Year Of Negotiations
It’s nearly certain that HHS has known for some time what those 10 drugs will be.
The Inflation Reduction Act phases in negotiation, adding more drugs over successive years, with instructions to focus on the drugs that are costing Medicare and its beneficiaries the most money. At the same time, the IRA excludes from negotiation some large classes of drugs, including those that already have competition as well as those that haven’t been on the market for very long.
And for this initial set of negotiations, the drugs can only come from Medicare Part D, which is the privately managed part of the program that covers most of the drugs people buy at pharmacies and administer themselves. Negotiation over drugs through Part B, which are typically administered in clinics and doctor’s offices, will take place in later years.
Based on that information, analysts at Moody’s and at the Center for American Progress ― along with researchers who published in the Journal of Managed Care & Specialty Pharmacy ― earlier this year identified drugs that they expected to see on the first list of 10.
Their predictions don’t line up perfectly with one another, in part because they were making projections based on dated information. But Leigh Purvis, director of health care cost and access at AARP, said this week that likely candidates for negotiations include Eliquis, which prevents blood clots; Januvia, which raises insulin levels for people with Type 2 diabetes; and Imbruvica, which treats certain kinds of cancer.
Eliquis, the Moody’s analysis noted, “had more than twice the gross spending of the next highest Medicare Part D drug. That makes it the most likely candidate for price negotiations.”
Following this week’s announcement, the negotiation process for those first 10 drugs will play out over the course of the following year, with the federal government collecting more data and soliciting public input ― and, eventually, exchanging price offers with manufacturers.
If those talks don’t lead to agreements with drugmakers along the way, then the government will make a final offer for what it considers a drug’s “maximum fair price” ― at which point the manufacturers can either accept the price, refuse it and pay financial penalties, or withdraw from selling drugs to Medicare and other public programs altogether.
But the negotiated prices won’t take effect until January 2026. And while the initiative will expand its reach with time, as a practical matter it’s going to be quite a while before Medicare beneficiaries see any savings from negotiations.
That may help explain why only 25% of Americans said they know that federal law now authorizes some price negotiation, according to a poll published in early August by the research organization KFF. Meanwhile, 12% said there was no such law and the rest ― 63% ― said they weren’t sure.
Some of the Inflation Reduction Act’s other drug-pricing provisions are kicking in sooner. Among them is a new, hard limit on out-of-pocket drug expenses in Medicare that will start to phase in next year. The effects of that will be especially visible to people with multiple high-cost medications ― although, as with price negotiations, most of the public doesn’t seem to know the change is coming.
A Chance To Raise Awareness ― And Public Support
This week’s announcement represents one attempt by Biden and his allies to raise awareness of these reforms. That could help protect them from future repeal efforts and, more immediately, could help Democrats in the 2024 elections.
Not only does drug price negotiation have consistently high poll numbers, even with self-identified Republican voters, but it is among those rare causes that has strong support from relatively conservative Democrats as well as their more liberal counterparts.
“Democrats are incredibly united on Medicare negotiation. It’s in all the messaging and all the polling,” Alex Lawson, the executive director at Social Security Works and a high-profile advocate for the reforms that became law last year, told HuffPost. “Call up any pollster, their main things will be, run on lowering drug prices ― that’s the issue, the issue everybody loves, no matter where you are.”
Of course, the Democrat who stands to benefit the most might be Biden, whose job approval ratings have been negative since early 2022. Letting voters know that he is responsible for enacting ― and then implementing ― a reform they like could help turn those numbers around.
The first step in that process is making sure voters realize the reforms are actually taking place.