WASHINGTON (AP) \u2014 President\u00a0Joe Biden\u2019s\u00a0administration will announce on Tuesday the first prescription drugs being targeted by the U.S. government for price negotiations as part of an effort to lower\u00a0Medicare\u00a0costs.
The announcement is a significant step under the\u00a0Inflation Reduction Act,\u00a0which was signed by Biden last year. The law requires the federal government for the first time to start negotiating directly with companies about the prices they charge for some of Medicare\u2019s most expensive drugs.
The process has drawn\u00a0legal challenges from drugmakers\u00a0and heavy criticism from Republicans in Congress. It\u2019s also a centerpiece of Biden\u2019s reelection pitch as he seeks a second term in office by touting his work to lower costs for Americans at a time when the country has struggled with inflation.
Biden plans to deliver a speech on health care costs from the White House after the announcement. He\u2019ll be joined by Vice President Kamala Harris.
More than 52 million people who are either 65 or older or have certain severe disabilities or illnesses get prescription drug coverage through Medicare\u2019s Part D program, according to the Centers for Medicare and Medicaid Services, or CMS.
About 9% of Medicare beneficiaries age 65 and older said in 2021 that they did not fill a prescription or skipped a drug dose due to cost, according to research by the Commonwealth Fund, which studies health care issues.
CMS aims to negotiate the lowest maximum fair price for drugs on the list released Tuesday. That could help some patients who have coverage but still face big bills like high deductible payments when they get a prescription.
Currently, pharmacy benefit managers that run Medicare prescription plans negotiate rebates off a drug\u2019s price. Those rebates sometimes help reduce premiums customers pay for coverage. But they may not change what a patient spends at the pharmacy counter.
The new drug price negotiations aim \u201cto basically make drugs more affordable while also still allowing for profits to be made,\u201d said Gretchen Jacobson, who researches Medicare issues at Commonwealth.
Drug companies that refuse to be a part of the new negotiation process will be heavily taxed.
The pharmaceutical industry has been gearing up for months to fight these rules. Already, the plan faces several lawsuits, including complaints filed by drugmakers Merck and Bristol-Myers Squibb and a key lobbying group, the Pharmaceutical Research and Manufacturers of America, or PhRMA.
PhRMA said in a federal court complaint filed earlier this year that the act forces drugmakers to agree to a \u201cgovernment-dictated price\u201d under the threat of a heavy tax and gives too much price-setting authority to the U.S. Department of Health and Human Services.
PhRMA representatives also have said pharmacy benefit managers can still restrict access to drugs with negotiated prices by moving the drugs to a tier of their formulary \u2014 a list of covered drugs \u2014 that would require higher out-of-pocket payments. Pharmacy benefit managers also could require patients to try other drugs first or seek approval before a prescription can be covered.
Republican lawmakers also have blasted the Biden administration for its plan, saying companies might pull back on introducing new drugs that could be subjected to future haggling. They\u2019ve also questioned whether the government knows enough to suggest prices for drugs.
CMS will start its negotiations on drugs for which it spends the most money. The drugs also must be ones that don\u2019t have generic competitors and are approved by the Food and Drug Administration.
CMS plans to meet this fall with drugmakers that have a drug on its list, and government officials say they also plan to hold patient-focused listening sessions. By February 2024, the government will make its first offer on a maximum fair price and then give drugmakers time to respond.
Any negotiated prices won\u2019t take hold until 2026. More drugs could be added to the program in the coming years.<\/p>\n\n\n\n
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