The Biden administration’s recent drug price negotiations under the Inflation Reduction Act represent a ground-breaking shift in U.S. healthcare. The first round of negotiations will reduce the cost of 10 high-expense drugs, such as Merck’s Januvia and BMS’s Eliquis, with cuts ranging from 38% to 79%. These reductions are projected to save Medicare $6 billion and patients $1.5 billion in out-of-pocket costs by 2026.
However, this move raises critical questions: Is this the beginning of the end of the U.S. as the priority market for manufacturers? With lower prices, the U.S. may become less attractive, potentially leading to significant revenue cuts and reduced funds for reinvestment into new drug development.
| Drug | Company | Indication | Negotiated discount from 2023 list price | Total Part D prescription drug costs* | Number of Part D enrolees using the drug* |
| Januvia | Merck & Co. | Diabetes | 79% | $4.1 billion | 843,000 |
| Fiasp/NovoLog | Novo Nordisk | Diabetes | 76% | $2.6 billion | 785,000 |
| Farxiga | AstraZeneca | Diabetes; heart failure; chronic kidney disease | 68% | $4.3 billion | 994,000 |
| Enbrel | Amgen | Rheumatoid arthritis; psoriasis; psoriatic arthritis | 67% | $3.0 billion | 48,000 |
| Jardiance | Boehringer Ingelheim/Lilly | Diabetes; heart failure | 66% | $8.8 billion | 1.9 million |
| Stelara | J&J | Psoriasis; psoriatic arthritis; Crohn’s disease; ulcerative colitis | 66% | $3.0 billion | 23,000 |
| Xarelto | Bayer/J&J | Prevention and treatment of blood clots; reduction of risk for patients with coronary or peripheral artery disease | 62% | $6.3 billion | 1.3 million |
| Eliquis | BMS | Prevention and treatment of blood clots | 56% | $18.3 billion | 3.9 million |
| Entresto | Novartis | Heart failure | 53% | $3.4 billion | 664,000 |
| Imbruvica | AbbVie/J&J | Blood cancers | 38% | $2.4 billion | 17,000 |
* For 2023
For pharmaceutical companies, these price cuts could reduce revenue, especially for drugs like Januvia and Eliquis, prompting a potential reassessment of pricing strategies in response to a more aggressive regulatory environment.
While these changes will make medications more affordable for Medicare patients, there is a concern that companies may limit drug availability or delay new therapies, potentially impacting patient access in the longer term.
This development sets a precedent for future rounds of price negotiations, which are expected to continue. Discussions for 15 additional drugs are due to begin in 2025. As pharmaceutical companies like Boehringer Ingelheim attempt to push back against price negotiations through legal challenges, this development highlights the complex and evolving landscape of drug pricing.
With these developments, there is a growing need for strategic planning to navigate price negotiations, potential legal challenges, and the broader implications for drug availability and patient access. Staying ahead of these changes will be vital for companies to maintain market viability and ensure that patients continue to have access to necessary treatments.
Contact Remap Consulting today to explore how we can help you improve patient access worldwide.
Source:
Bratulic A. US releases negotiated drug prices that will save Medicare $6B in 2026. FirstWord Pharma. Published August 15, 2024. Accessed August 15, 2024. https://firstwordpharma.com/story/5885766