AstraZeneca, BMS Reluctantly Agree to Medicare Drug Price Negotiation Program
Pictured: Entrance to the U.S. Department of Health and Human Services/iStock, hapabapa
Despite being staunchly opposed to the Inflation Reduction Act’s Drug Price Negotiation Program, AstraZeneca and Bristol Myers Squibb have been left with no choice but to participate, according to Endpoints News.
Under the Inflation Reduction Act (IRA) provisions, companies whose drugs are set to join the first round of drug price negotiations have until Oct. 1 to signify whether they are participating or not. AstraZeneca will negotiate for its type 2 diabetes therapy Farxiga (dapagliflozin), while BMS will discuss the prices for its blood thinner Eliquis (apixaban).
“We have no choice other than to sign the ‘agreement,’” a BMS spokesperson told Endpoints. “If we did not sign, we’d be required to pay impossibly high penalties unless we withdraw all of our medicines from Medicare and Medicaid. That is not a real choice.”
In late August 2023, the Centers for Medicare and Medicaid Services (CMS) named the first 10 drugs included in the first round of negotiations. Aside from Farxiga and Eliquis, the list also included diabetes drugs Jardiance (empagliflozin) and Januvia (sitagliptin), as well as the anticoagulant Xarelto (rivaroxaban), heart failure therapy Entresto (sacubitril/valsartan) and psoriasis treatment Enbrel (etanercept).
The companies that own these drugs—including Johnson & Johnson, Eli Lilly and Novartis—will also have to register their participation into the program by the Oct. 1 deadline, according to CMS.
President Joe Biden signed the IRA into law in August 2022, seeking to generate around $25 billion in drug cost savings for the government over the next eight years. The Medicare Drug Price Negotiation Program is set to cover some of the most widely prescribed medicines, with their new prices set to take effect in 2026.
According to a recent research brief published last month in the Journal of Managed Care & Specialty Pharmacy, the program will save approximately $1.8 billion for Medicare in just its first year of implementation.
Analysts also expect that the program would only lead to minimal financial losses for companies, at least initially, since most of the drugs that are up for negotiation are also nearing the end of their patent protections. Januvia, for example, will lose its market exclusivity in 2026, the same year that the renegotiated prices are set to take effect.
Nevertheless, the biopharma industry—led by some of its largest companies—has strongly opposed the IRA’s Drug Price Negotiation Program. Merck kicked off the legal battle in June 2023, when it filed the first lawsuit attempting to block the negotiations program. It has since been joined by BMS, AstraZeneca, Novartis and Boehringer Ingelheim.
Earlier this month, Astellas voluntarily dismissed its lawsuit against the Biden administration after its drug Xtandi was not among the initial list of 10 drugs selected for the program.