According to a recent research brief published in the Journal of Managed Care & Specialty Pharmacy, Medicare could be set to save a colossal sum of $1.8 billion from just four medicines when the Inflation Reduction Act’s Drug Price Negotiation Program kicks off in 2026. An incredible opportunity to make sure seniors don’t break the bank when they need drugs.
In August 2022, President Joe Biden signed the long awaited, much-celebrated International Reimbursement Agreement (IRA) into law. This powerful new piece of legislation emboldens the Department of Health and Human Services to renegotiate prices for up to 35 of the most regularly prescribed medications – starting in 2026! The agreement means real-world savings for patients, allowing them to access the medications they need in order to lead healthier lives.
A study conducted in March 2023 published in the Journal of Managed Care & Specialty Pharmacy attempted to identify the drugs that could be included in a new negotiation program. Taking into account expensive government spending and potential influx of generic or biosimilar competition, the paper anticipates that Amgen’s Enbrel (etanercept) and Janssen’s Imbruvica (ibrutinib) will be the prime contenders in this first round of negotiations.
A recent research brief indicates that Enbrel is predicted to remain discounted at a rate of 60%, while Imbruvica is expected to be discounted by a minimum of 25%. In addition, two more medications—Pfizer’s Ibrance (palbociclib) and Astellas’ and Pfizer’s Xtandi (enzalutamide)—are expected to incur a discount of at least 25%. Combined, these four drugs will bring about an estimated $1.8 billion in savings for the federal government.
The IRA is striving to make a huge impact on the healthcare system, aiming to generate an impressive $25 billion in drug cost savings in the next eight years. By achieving this ambitious goal, it will work to improve overall affordability and accessibility to essential treatments and medications.
In the upcoming year, Merck’s Januvia (sitagliptin), Janssen’s Xarelto (rivaroxaban), Bristol Myers Squibb and Pfizer’s Eliquis (apixaban), and Lilly and Boehringer Ingelheim’s Jardiance (empagliflozin) are all expected to be part of the intensive drug price negotiations that the Individual payer Reimbursement Analysis (IRA) group will tackle. This was supported by a March study by IRA, making these four medicines among the first to be negotiated.
In June 2023, Merck took bold action by filing a lawsuit against the Biden administration, challenging the constitutionality of the Medicare Drug Price Negotiation Program, aiming to make up for the billions of dollars lost in potential savings.
A new lawsuit from Merck alleges that the 340B Drug Pricing Program—designed to lower the cost of medicines for at-risk populations—violates the Fifth Amendment’s provision for just compensation and the First Amendment’s protection for free speech. The program requires companies to sell medicines below market value, and to effectively concede that those prices are fair, thus infringing upon fundamental Constitutional rights.
Only a few weeks after Merck opened legal proceedings to halt the negotiation program, Bristol-Myers Squibb followed suit in mid-June. Now, the U.S. Chamber of Commerce, supported by several state chambers of commerce, is looking to put a stop to the program as well, filing a motion for preliminary injunction with a Ohio district court in July. The court battle to decide the fate of the negotiation program is in full swing.