Welcome to the Week in Review.
Round 2 Medicare Negotiation Prices Announced
Last Tuesday, the Centers for Medicare and Medicaid Services (CMS) announced new lower prices for the second round of Medicare drug price negotiations. It’s a major milestone for the program that’s delivering continued savings for patients and taxpayers. Over 5 million patients on Medicare take one of the 15 drugs included in this round, which accounted for $42.5 billion in Medicare Part D spending from November 2023 to October 2024. The announced prices are consistent between both rounds, and according to CMS, Medicare savings will double to $12 billion in 2027, due in part to the inclusion of five additional drugs this round and significant discounts on high-cost GLP-1s. Patients on these 15 drugs have struggled to afford them for years — including patients in our community like Aarolyn from Michigan, and Janet from South Carolina. If these new prices had already been in effect in 2024, patients would have saved $685 million in out-of-pocket costs. For patients who’ve been forced to work multiple jobs, cut pills in half, or choose between filling a prescription and buying groceries, these lower prices will bring long-overdue relief, flexibility, and stability. — [CMS, P4AD, The Hill, CBS News, STAT News, Inside Health Policy, Healthcare Finance]
Entresto, Stelara, and Xarelto to be Removed from Negotiations
In another significant shift for the Medicare negotiation program, CMS announced that Entresto, Stelara and Xarelto will be removed in 2027 after determining that the drugs now face generic or biosimilar competition. These three drugs were included in round one of Medicare negotiations, and their lower negotiated prices will take effect in less than a month, meaning that these prices will be in place for only one year. Medicare negotiation was established as a check on pharma’s monopoly power, specifically targeting drugs that have evaded competition and kept Americans paying between 4 and 8 times more than patients in other high-income countries. One of the criteria for a drug to be included in the program is being single-source, meaning that the product doesn’t have generic or biosimilar versions available in the same class and therefore no bona fide competition on the market. While we don’t yet know the extent to which the new competition will lower the prices for these three drugs — the main concern for the patients who need them — incentivizing generic or biosimilar rivals to enter the market is a win that has historically lowered prices and benefited patients. — [CMS, Inside Health Policy, POLITICO]
Pharma Celebrates New U.S. & U.K. Deal
The U.K. has committed to increasing its spending on new drugs, entering an agreement with the U.S. after facing pressure from the Trump administration and potential pharmaceutical tariffs. The U.K’s National Institute for Health and Care Excellence (NICE) will increase its cost-effectiveness threshold by 25 percent to £35,000 per quality adjusted life year (QALY), meaning that the National Health Service (NHS) will pay more for medicines. This is a massive win for pharma, and predictably the industry’s lobbyists quickly responded by urging other European countries to mirror the agreement. Imposing higher prices on patients in other countries does nothing to reduce the burden on Americans who are forced to decide between paying rent and obtaining life-saving medications. Indeed, the Pharma CEOs that testified at a Senate Finance Committee hearing in 2019, confirmed under oath that they make a profit in every country where they sell their drugs. Hiking expenditures for the U.K. government only boosts the bottom line for one of the most profitable industries on the planet. — [POLITICO, STAT News, POLITICO]
ICYMI
Eli Lilly has officially hit $1 trillion in value — the first “healthcare” company to reach this milestone. Like nearly all pharmaceutical companies industry-wide, Eli Lilly has consistently complained that transformative programs like Medicare negotiation and reforms to rein in drug monopolies will force them to scale back innovation and R&D investment, preferring instead to promote voluntary, one-off agreements, like last month’s GLP-1 deal with the Trump administration. The news of Eli Lilly’s record-high valuation makes their arguments against lowering prices offensive, particularly when 1 in 3 Americans can’t afford the cost of their prescription drugs. — [New York Times, CNBC, Reuters, BioPharma Dive]
Patient Advocate Spotlight: Joe Kerrigan
Background: Patient advocate from Myrtle Beach, South Carolina
Drug: Janumet ($740 per 60-day supply)
In the words of his wife Janet: “Janumet is not just helpful — it’s necessary. But the cost is outrageous. Merck charges our insurance $740 for a 60-day supply. Even with coverage, we end up paying anywhere between $324 and $631, depending on which pharmacy we go to. That’s on top of our $185 monthly Medicare premium. My husband lives on $14,000 a year from Social Security – once we pay for his medicine, we have less than $10,000 left to live on for the year. We’ve come close to bankruptcy — not once, but multiple times — just trying to afford the medications that keep us alive.”
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