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When Democrats passed Biden’s Inflation Reduction Act last year, one of the provisions was that Medicare, for the first time in its history, would be able to start negotiating drug prices directly with the manufacturers. The drug companies have to sign agreements by October 1 to join the negotiations, or else pay a fine. Yesterday, the Biden administration announced the first 10 drugs that are up for negotiation:
Eliquis, made by Bristol-Myers Squibb, is used to prevent blood clotting, to reduce the risk of stroke.
Jardiance, made by Boehringer Ingelheim, is used to lower blood sugar for people with Type 2 diabetes.
Xarelto, made by Johnson & Johnson, is used to prevent blood clotting, to reduce the risk of stroke.
Januvia, made by Merck, is used to lower blood sugar for people with Type 2 diabetes.
Farxiga, made by AstraZeneca, is used to treat Type 2 diabetes.
Entresto, made by Novartis, is used to treat certain types of heart failure.
Enbrel, made by Amgen, is used to treat rheumatoid arthritis.
Imbruvica, made by AbbVie, is used to treat different types of blood cancers.
Stelara, made by Janssen, is used to treat Crohn’s disease.
Fiasp and NovoLog, insulins made by Novo Nordisk.
CNBC broke down more details on the numbers, dates, and lawsuits involved with the new Medicare vs Big Pharma wars negotiations:
A new deal: “Today is the start of a new deal for patients, so big pharma doesn’t just get a blank check at your expense – at the expense of the American people,” Biden said in a speech at the White House on Tuesday. “On my watch, health care should be a right, not a privilege, in this country.”… The drugs listed Tuesday are among the top 50 with the highest spending for Medicare Part D, which covers prescription medications that seniors fill at retail pharmacies. The 10 medicines accounted for $50.5 billion, or about 20% of total Part D prescription drug costs from June 1, 2022, to May 31, 2023, according to the Centers for Medicare and Medicaid Services, or CMS… In 2022 alone, 9 million seniors spent $3.4 billion out-of-pocket on the 10 drugs, a senior Biden administration official told reporters Tuesday during a call.
Rules of the game: Drugmakers have to sign agreements to join the negotiations by Oct. 1. CMS will then make an initial price offer to manufacturers in February 2024, and those companies have a month to accept or make a counteroffer. The negotiations will end in August 2024, with agreed-upon prices published on Sept. 1, 2024. The reduced prices won’t go into effect until January 2026. If a drugmaker declines to negotiate, it must either pay an excise tax of up to 95% of its medication’s U.S. sales or pull all of its products from the Medicare and Medicaid markets. The pharmaceutical industry contends that the penalty can be as high as 1,900% of a drug’s daily revenues. After the initial round of talks, CMS can negotiate prices for another 15 drugs for 2027 and an additional 15 in 2028. The number rises to 20 negotiated medications a year starting in 2029 and beyond.
The empires strike back: Merck, Johnson & Johnson, Bristol-Myers Squibb and Astellas Pharma are among the companies suing to halt the negotiation process. The industry’s biggest lobbying group, PhRMA, and the U.S. Chamber of Commerce have filed their own lawsuits. The suits make similar and overlapping claims that Medicare negotiations are unconstitutional. The companies argue that the talks would force drugmakers to sell their medicines at huge discounts, below market rates. They assert this violates the Fifth Amendment, which requires the government to pay reasonable compensation for private property taken for public use. The suits also argue that the process violates drugmakers’ free speech rights under the First Amendment, essentially forcing companies to agree that Medicare is negotiating a fair price. They also contend that the talks violate the Eighth Amendment by levying an excessive fine if drugmakers refuse to engage in the process.
Big pharma wants to take this to the Supreme Court: The suits are scattered in federal courts around the U.S. Legal experts say the pharmaceutical industry hopes to obtain conflicting rulings from federal appellate courts, which could fast-track the issue to the Supreme Court. Some drugmakers have confirmed their intention to bring their legal battle to the nation’s highest court. “As we look forward, we’re going to take this to the fullest, which means we’ll take it through District Court and, if need be, into Circuit Court and ultimately to the Supreme Court,” Merck CEO Robert Davis said during an earnings call earlier this month. “So, really that’s the strategy.”
“But your honor, this policy violates my client’s right to make a fortune off the sickness of seniors!” Which amendment is it again that protects businesses against any ethics or morals? The eleventy-first? None of the drug companies’ retaliation strategy is surprising, but the depth of their Scrooge McDuckiness is still always startling. And I’m very concerned about what will happen when these cases reach the hands of the current Supreme Court. I mean, can you imagine what Clarence Thomas’ response to Medicare will be? “Bitch, I haven’t paid out-of-pocket for anything in thirty years. Not my fault that you have!”
Go Dark Brandon!!!
This is awesome! For all those lower income seniors still voting Republican, shame on you!
Yup! We actually have a president that is trying to make this country better for EVERYONE but those who think that the party that uses fear tactics are the better choice!! From eliminating protections for minorities, the LGBTQ+ and denying ALL abortion rights, many of whom remember, or FOUGHT for those rights are too ignorant, or drank the koolaide, to see the difference.
I hope that when these greedy bastards take these fights to the courts that the annual PAY, AND bonuses, for these greedy CEOs are mentioned in by the defendants in court! It’s about time that people learn how much they are making to keep YOUR medications at such high prices.
So again no R voted for this.
Of course they didn’t.
For them, health is not a human right, it seems, but a commodity with a huge profit margin. The prospect of this ending up in front of a Supreme Court that doesn’t care about laws and justice scares me.
Fingers crossed the Biden admin will be able to negotiate down to average European levels of drug prices, where things are a lot cheaper.
But the Rs will all be there at the senior centers claiming credit for this – – something they didn’t vote for and have blocked and sabotaged for decades.
Big Pharma doesn’t exist as a money printing machine without the Medicare customer base which is why they aren’t saying okay go buy someone else’s drug. Additionally, outside of the US drug prices are already negotiated at a much lower rate with other governments so their argument likening this negotiation to the government seizure of their private property/eminent domain is truly laughable.
That said I fully expect SCOTUS to agree with Big Pharma.
Many of these branded drugs have no generic alternative, there’s no other drug to buy. One of the companies, the one making Entresto, is suing any generic competitors and preventing the generics from coming to market.
Yay. Now lets make this list of meds longer.
Interesting and ridiculous argument by Big Pharma considering that Medicare is the only subsidized insurance plan that can’t legally negotiate lower drug prices. Medicaid does. The VA definitely does (The Veterans Administration is a federal govt agency that implements govt funded income and insurance for disabled military vets and in some instances, their spouses and children). Private insurance companies absolutely negotiate drug prices. Other countries smartly negotiate and pay very reduced drug prices. These companies have made billions off of the fed govt and Social Security recipients. So not sure how that argument will hold up when other govt health plans have that basic and legal right. In fact, I would argue that its unconstitutional that Medicare, a federal program combined with Social Security that US workers are required to pay a portion of their wages into until retirement, is prevented from negotiating drug prices. Esp when Social Security beneficiaries (retirees and disability income recipients) are charged a monthly Medicare premium (currently $164 ) out of their monthly benefit checks from the moment they’re eligible and most are on a fixed income.
My husband takes Farxiga for a kidney autoimmune disease. He works for the VA Hospital great/expensive BCBS insurance – denied it, *technically* using it to treat for kidney disease is considered an off label use. Too expensive to get in the states, so his kidney dr has a whole setup helping patients get it from Canada. It’s fantastic and I appreciate the dr & his office setting up that system for their patients – but they shouldn’t have to!! Healthcare/big pharmacy/health insurance are horrendous capitalistic animals in the USA who no longer serve the users of the system & should be abolished and healthcare for all. I hate healthcare has become a political issue it’s a human right.
I feel gross that I can pronounce the names of most of these drugs – not because I take them or am a doctor, but because I’ve seen the damn commercials a bajillion times. And the only time I ‘watch’ live TV is when I have it on during the morning when taking my shower/getting ready for work.
How about you bums stop advertising your drugs constantly and maybe use that money to lower costs? Letting pharmaceuticals be advertised is one of the dumber de-regulations we’ve allowed in recent years.
Anyway, we can hope that suit doesn’t make it to the Supreme Court anytime soon. Or maybe by the time it has, Clarence Thomas or one of the other terrible ones will no longer be on the court. I can dream, can’t I?
Can’t wait to watch the SCOTUS hang the GOP for seniors.