CMS Takes On Big Pharma And Makes First Offers To Manufacturers Of The First Ten Drugs Selected For Drug Price Negotiation To Lower Prices For Prescription Drugs
Patients For Affordable Drugs Now, applauds the Centers for Medicare & Medicaid Services (CMS) as it takes the huge next step towards negotiating fair prices for essential medications. Today, CMS sent out its initial fair pricing offers to pharmaceutical manufacturers for the first 10 drugs selected for Medicare negotiations.
The 10 drugs chosen were identified as the top spending drugs covered under Medicare Part D without generic or biosimilar equivalents that have been on the market for at least seven years and also meet other selection criteria. These essential medications include cancer treatments, blood thinners, autoimmune disease treatments, and some diabetes drugs. Between June 2022 and May 2023, 8.3 million Medicare Part D enrollees used one or more of these medications. With 84 percent of voters backing Medicare negotiations, it’s clear CMS is doing work that is urgently demanded by the American public.
Merith Basey, Executive Director of Patients For Affordable Drugs Now, released the following statement:
“Patients For Affordable Drugs Now stands firmly in support of Medicare negotiation and efforts to curb the unjustified costs of prescription medications. We hear from patients everyday who are grappling with the crushing weight of exorbitant drug prices, forced to make impossible decisions between their health and financial well-being. We’ve listened to stories of people rationing insulin or other life-sustaining medications just to make ends meet. By advancing this process of direct negotiation with drug companies, CMS is helping ensure that fewer people will have to make these tough choices. Drugs don’t work if people can’t afford them, and today marks a historic milestone in the fight to lower drug prices for everyone.”
Background in Medicare negotiations:
- In 2022, Big Pharma charged Americans two to three times more than what they charged people in other OECD countries for the same drugs, even when accounting for rebates and discounts.
- For the first time in history, Medicare has the authority to negotiate prices for certain high-cost drugs, breaking a nearly 20-year ban on utilizing its purchasing power to secure better deals for Americans.
- The Medicare negotiation provision was established through the Inflation Reduction Act to lower the cost of expensive prescription drugs, rather than continuing to allow drug companies to raise prices indefinitely at will.
- Unlike every other sector in health care where Medicare sets prices such as doctor fees, hospital costs, and equipment, pharmaceutical companies have been exempt from any form of negotiation. Pharmaceutical companies have the option to participate in Medicare voluntarily. They can accept slightly lower negotiated prices if they want to tap that huge market worth billions.
- Negotiation will reward innovation. Factors such as therapeutic advances and meeting unmet needs will be considered in the negotiation process, rewarding more innovative drugs. Drug companies will continue to innovate to access this lucrative market, as they are rewarded for investment by still being able to set launch prices and maintain FDA-awarded periods of exclusivity.