Topline
A push by the Biden administration to lower government spending on prescription medications kicked off Tuesday with the announcement of the 10 drugs taken by millions of older Americans that will be subject to Medicare price negotiations.
A box of Bristol-Myers Squibb Co. Eliquis tablets are arranged for a photograph at a pharmacy in … [+]
Key Facts
The medications chosen for price negotiations cost senior citizens $3.4 billion in out-of-pocket costs last year, the Biden administration reported, and were chosen for the program because they account for the highest Medicare spending and no alternate drugs are covered or available.
The 10 medications announced Tuesday are the first in a four-year program that will negotiate prices for up to 60 drugs covered under Medicare Part D and Part B.
The 10 drugs are: Stroke and blood clot medications Eliquis and Xarelto, diabetes drugs Jardiance, Januvia, Fiasp and NovoLog, chronic kidney disease Farxiga, Entresto for heart failure, autoimmune and arthritis medicine Enbrel, Imbruvica for treating blood cancers and Crohn’s disease drug Stelara.
Negotiated prices will go into effect in 2026.
Key Background
Last year’s Inflation Reduction Act gave Medicare the authority to haggle the price of some prescription drugs to cut government spending to the tune of $237 billion over 10 years, the Congressional Budget Office estimates. It also set a $2,000 cap on annual out-of-pocket prescription drug costs for Medicare recipients starting in 2025. The bill—which also included the creation of a corporate minimum tax rate, invested $80 billion in the IRS and extended Affordable Care Act subsidies—was passed by the House by a vote of 220–207 last August—all Democrats were in favor and all Republicans voted against it. A West Health-Gallup poll released Monday shows 83% of Americans are in favor of the negotiations despite their political party.
Big Number
112,000. That’s how many premature deaths per year are expected to be caused by not taking prescribed drugs because of costs, a 2020 study showed. Millions more are expected to see their health worsen because they can’t afford their medications, costing Medicare an additional $18 billion per year for the next 10 years, the nonprofit West Health Policy Center predicted.
Walgreens pharmacy.
The Medications Selected For Price Negotiations
Eliquis—Used to treat and prevent blood clots, the Pfizer and Bristol-Myers Squibb drug Eliquis was the 48th most-prescribed medication in the United States in 2020. The generic version of the medication, apixaban, is not available in the U.S. after Bristol Myers Squibb and Pfizer had their patent claims upheld by a court, protecting their exclusivity until 2028. The two companies filed another lawsuit to block copies of Eliquis in federal court in Delaware in April. The list price for a 30-day supply is $561.
Xarelto—A generic version of Xarelto, called rivaroxaban, is expected to be available in the United States in 2024. Johnson & Johnson’s Xarelto has been on the market since 2011 and is used to treat deep vein thrombosis and to prevent blood clots following hip or knee surgery, among other uses. The average retail price is $598.
Jardiance—Type 2 Diabetics use Jardiance, made by Boehringer Ingelheim and Eli Lilly, to improve glucose control. It was approved for U.S. use in 2014 and, in 2020, was prescribed to 6 million Americans. Jardiance last year was also approved by the U.S. Food and Drug Administration to reduce risk of cardiovascular death and hospitalization last year. The FDA has approved several generic versions of Jardiance but they’re not expected to be available in the U.S. until 2025. Prices for Jardiance start at $578.
Januvia— Nearly 10 million Type 2 diabetics were prescribed Januvia—the brand name of sitagliptin—in 2020 to improve blood sugar control. The JAMP Pharma Group earlier this year was authorized to market a generic version of the Merck & Co. medication, which can cost $586 for a month’s supply.
Fiasp and NovoLog— Novo Nordisk makes both Fiasp and NovoLog, insulin products for both Type 1 and Type 2 diabetes. Prices start at $550 for Fiasp and $314 for NovoLog. More than more than 9 million people were prescribed insulin aspart in 2020, which is available as a generic medication.
Farxiga—Farxiga is used to improve blood sugar control for Type 2 diabetics as well treat heart failure and chronic kidney disease. The generic, dapagliflozin, is available in the U.S. and more than 2.2 million were prescribed either the generic or the brand name AstraZeneca medication in 2020. Prices for Farxiga start at $551.
Entresto—The Novartis drug Entresto is not available in a generic version and is taken by more than 2 million Americans to treat certain types of heart failure. Enestro contains two different drugs, sacubitril and valsartan, and costs, on average, $893.
Enbrel—The FDA approved Amgen’s Enbrel in 2014 to treat patients with plaque psoriasis, a chronic immune disorder. There is no generic version of the drug—etanercept—available on the market and Enbrel can cost as much as $6,897 for a supply of 4 milliliters.
Imbruvica—Patients with blood cancers like mantle cell lymphoma and chronic lymphocytic leukemia are prescribed Johnson & Johnson’s Imbruvica—the brand name of Ibrutinib—to inhibit B-cell proliferation. Imbruvica, which is usually taken by patients daily, costs as much as $484 per pill.
Stelara—Stelara, a Johnson & Johnson medication, has been approved to treat Crohn’s disease, plaque psoriasis and psoriatic arthritis. It is administered through infusion or injection and can cost $13,971 for a supply of 0.5 milliliters. There are no generic alternatives.
Further Reading
The Inflation Reduction Act Is Now Law—Here’s What It Means For You (Forbes)
How The Inflation Reduction Act Could Affect The Biopharma Industry (Forbes)
Major Insurer Blue Shield Of California Drops CVS For Amazon, Cuban’s Cost Plus Drugs In Cost-Cutting Move (Forbes)
Prescriptions For Produce? Patient Health Improves When Programs Pay For Fruits And Veggies, New Study Says (Forbes)