Drug companies agree to negotiate prices with US government.

Drug companies agree to negotiate prices with US government.

Pharmaceutical Companies Agree to Price Negotiations for Medicare Prescription Drugs

Medicare Prescription Drugs

Pharmaceutical companies that produce the ten prescription drugs selected for price negotiations for Medicare patients have agreed to engage in talks with the government. This comes amidst ongoing lawsuits over the requirement. The Biden administration announced that companies such as Merck, Bristol Myers Squibb, and Johnson & Johnson will participate in these price negotiations, as reported by NBC News.

The negotiations are part of the Inflation Reduction Act, which empowers Medicare to work alongside drug companies to lower prices for older Americans. These negotiations will take place next year, with the resulting prices taking effect in 2026. The Centers for Medicare and Medicaid Services have identified the first ten drugs for these negotiations, which include Januvia, a diabetes medication, Enbrel for rheumatoid arthritis, and the blood thinners Eliquis and Xarelto.

NBC News reports that approximately nine million Medicare patients paid $3.4 billion out-of-pocket for these ten specific drugs last year. It is worth noting that additional drugs will be added to the negotiations at a later stage.

To encourage participation, the federal government provided manufacturers with a one-month window to decide whether they would engage in talks or face tax penalties. Drug manufacturers could avoid the penalty by removing their drugs from the Medicare program, although this could also result in significant costs.

Companies currently involved in lawsuits, including Merck and Johnson & Johnson, argue that negotiations may impact their profits and subsequently hinder spending on research and development efforts.

With over 65 million older Americans relying on Medicare for health insurance, these negotiations hold significant importance. The cost of prescription drugs is a major concern for older adults, and the outcome of these negotiations will directly impact their healthcare expenses.


More information can be found at The AARP

Source: NBC News, Oct. 3, 2023

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