HELPING YOU PUT TOGETHER YOUR MEDICARE PUZZLE

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???????? WASHINGTON — This Tuesday, Medicare revealed it’s entering price negotiations for a range of 10 crucial medications, such as major blood thinners and antidiabetic drugs. This is part of the inaugural phase of a program set in motion by the Democratic Party’s drug pricing reform legislation.

????????️ Among the chosen medications are Bristol Myers Squibb’s Eliquis for blood thinning, Boehringer Ingelheim and Eli Lilly’s Jardiance for diabetes, and other critical treatments like Johnson & Johnson’s Xarelto and Merck’s Januvia. A full roster of selected medications has been provided by the Department of Health and Human Services.

????️⏳ The revised prices are set to be disclosed on September 1, 2024, and will be officially implemented on January 1, 2026. These medicines were picked from a larger list of 50 costly treatments that weigh heavily on Medicare’s pharmacy budget. They alone cost Medicare over $50 billion and constitute a fifth of all Medicare pharmacy expenses in a year.

???????? Investors in these pharmaceutical companies have so far remained relatively unfazed by the legislative changes. However, that sentiment might waver as the actual price cuts begin to roll out.

????️????️ In a crowded White House event featuring drug pricing advocates, President Biden hailed this as a victory for the Democratic Party. Despite universal opposition from Republicans, the President emphasized the program’s broad appeal among American voters.

???????? “Medicare spends $50 billion annually on these ten drugs alone, and seniors are out-of-pocket $3.4 billion,” Biden declared. He also tethered this initiative to his broader “Bidenomics” plan, stating that it would help reduce the federal deficit.

⚖️???? However, the plan’s future is still uncertain due to pending lawsuits from several drug manufacturers claiming the program is unconstitutional. This includes companies like Merck and Bristol Myers Squibb. The U.S. Chamber of Commerce is also calling for an immediate halt to the program’s implementation.

???????? When asked about legal challenges, Neera Tanden, director of the Domestic Policy Council, expressed confidence that the program doesn’t violate the Constitution.

???????? The first set of negotiations will start with 10 medications available at pharmacies. More drugs will be added in the subsequent years, and Medicare aims to negotiate a minimum discount ranging from 25% to 60%.

???????? Once the drugs for negotiation are chosen, various factors like clinical benefits and unmet medical needs will guide the initial offer to pharmaceutical companies. Despite concerns, analysts from Leerink Partners foresee minimal impact on the drug manufacturers’ bottom line from this first round.

???????? The choice of some drugs like Stelara and specific insulins surprised analysts. Some of these drugs were already on the verge of losing their market exclusivity, reducing the potential impact of the negotiations.

???????? For seniors, the law also sets a $35 cap on monthly out-of-pocket costs for insulin, but some might even pay less under certain plans.

???????? The criteria for drug selection were outlined in the drug pricing reform law, targeting the drugs that are the most expensive for Medicare, irrespective of individual patient costs. For instance, Eliquis was the priciest, costing Medicare $16.5 billion in just one year.

???????? An analysis showed that drugs like Eliquis, Jardiance, and Enbrel constitute significant portions of their respective companies’ U.S. sales. The presence of generic or biosimilar options could also influence the negotiation outcomes.

???????? Finally, if generic versions enter the market within specific dates, it may affect the application of the negotiated prices.

????????️ A report indicated that the savings from negotiations might not necessarily be passed on to consumers, a concern voiced by industry insiders.

???????? All these factors make the future of this program, as well as its impact on patients and the pharmaceutical industry, a subject of ongoing interest and debate.

MBG IS AN INSURANCE BROKER AND IS NOT ASSOCIATED, ENDORSED, OR AUTHORIZED BY THE SOCIAL SECURITY ADMINISTRATION, THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, OR THE CENTER FOR MEDICARE AND MEDICAID SERVICES (CMS)

https://www.medicarebenefitsgroup.com/contact/