CMS Announces Negotiated Prices for 10 Drugs Under Inflation Reduction Act

CMS has announced the negotiated lower prices for the 10 drugs that were initially selected for price negotiation under the Inflation Reduction Act (IRA), with the new prices expected to go into effect for patients with Medicare Part D beginning January 1, 2026. The drugs cover disease states including diabetes, heart failure, rheumatoid arthritis, chronic kidney disease, psoriasis, psoriatic arthritis, cardiovascular disease, and blood cancers.¹

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“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,” Xavier Becerra, secretary of the US Department of Health and Human Services, said in a news release. “Congressional budget estimators (Congressional Budget Office) predicted about $100 billion savings over 10 years from drug negotiations, and a $3.7 billion savings in the first year alone. Today we’re announcing that in our first year of negotiations we are saving Medicare an estimated $6 billion and Americans who pay out of pocket will be saving another $1.5 billion moving forward.”¹

In August 2023, CMS announced the first 10 prescription drugs chosen for price negotiation. According to CMS, the drugs that were selected accounted for approximately 20% (nearly $50.5 billion) of the total cost of drugs in Part D from June 1, 2022, to May 31, 2023.In August 2022, President Biden signed the Inflation Reduction Act of 2022 into law, which advanced Medicare with growing benefits, lower drug costs, and improved viability of the program.²

The percentage discount for the negotiated prices are as follows³:

• Apixaban (Eliquis; Bristol Myers Squibb): 56%
• Empagliflozin (Jardiance; Boehringer Ingelheim): 66%
• Rivaroxaban (Xarelto; Janssen Pharms): 62%
• Sitagliptin (Januvia; Merck Sharp Dohme): 79%
• Dapagliflozin (Farxiga; AstraZeneca AB): 68%
• Sacubitril/valsartan (Entresto; Novartis Pharms Corp): 53%
• Etanercept (Enbrel; Immunex Corporation): 67%
• Ibrutinib (Imbruvica; Pharmacyclics LLC): 38%
• Ustekinumab (Stelara; Janssen Biotech Inc): 66%
• Insulin aspart: 76% (including Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog Flexen, NovoLog PenFill; Novo Nordisk)

“CMS negotiated in good faith on behalf of the millions of people who rely on these 10 drugs for their health and well-being. The new negotiated prices will bring much needed financial relief, affordability, and access,” Meena Seshamani, MD, PhD, deputy administrator and director of the Center for Medicare at CMS, said in the news release. “Our team is actively working on the next cycle of negotiations where we will combine what we have learned from this first cycle and apply it in negotiating prices for the next round of up to 15 selected drugs.”¹

CMS is expected to select 15 more drugs to be covered under Part D, with negotiations planned for 2027, and 15 additional drugs for 2028. There will be 20 more drugs selected for each following year, according to an article by Pharmacy Times. Drugs that are covered under Part A and Part D will be involved in the selection for year 2028.²

In addition, individuals who have Medicare Part D will see a $2000 out-of-pocket cap on prescription drug costs, according to CMS.¹

References

1. Negotiating for Lower Drug Prices Works, Saves Billions. News release. CMS. August 15, 2024. Accessed August 15, 2024. https://www.cms.gov/newsroom/press-releases/negotiating-lower-drug-prices-works-saves-billions

2. Ferruggia K. CMS Announces First 10 Drugs to Undergo Price Negotiations Under Inflation Reduction Act. News release. August 30, 2023. Accessed August 15, 2024. https://www.pharmacytimes.com/view/cms-announces-first-10-drugs-to-undergo-price-negotiations-under-inflation-reduction-act

3. Medicare drug price negotiation program: negotiated prices for initial price applicability year 2026. CMS. August 2024. Accessed August 15, 2024. https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated-prices-initial-price-applicability-year-2026