CMS Tuesday morning announced its list of 10 drugs—spanning disease states from diabetes to heart failure to rheumatoid arthritis—that will be subject to Medicare price negotiation under the Inflation Reduction Act (IRA).1 Negotiations between Part D and pharmaceutical companies will take place this year and next, with the negotiated prices taking effect in 2026.
The list includes 2 drugs with approved or pending biosimilars, as well as forms of insulin, which have attracted policy efforts to lower their cost. The 10 drugs are:
These drugs run the gamut from anticoagulants (apixaban, rivaroxaban) to antidiabetic agents (empagliflozin, sitagliptin, dapagliflozin, insulin aspart) to therapies for heart failure (sacubitril/valsartan), autoimmune conditions (etanercept, ustekinumab), and B-cell cancers (ibrutinib).
The announcement noted that these drugs accounted for about one-fifth of total Part D–covered prescription drug costs between June 1, 2022, and May 31, 2023, or approximately $50.5 billion. During the negotiation process, Medicare and the manufacturers will need to consider each drug’s clinical benefit, indication for unmet clinical need, and impact on Medicare beneficiaries.
“As a result of negotiations, people with Medicare will have access to innovative, life-saving treatments at lower costs to Medicare,” the statement read.
Although the negotiated prices for this initial list will take effect January 1, 2026, CMS will also select up to 15 additional drugs for which Part D negotiations will occur for 2027, up to 15 more for 2028 (including both Part B and Part D), and up to 20 more drugs for each subsequent year.
The price negotiation initiative outlined in the IRA has encountered fierce pushback from the pharmaceutical industry. In July, the US Chamber of Commerce filed a motion to block the application of the program, claiming it violated the First, Fifth, and Eighth Amendments. The Department of Justice responded a month later, contending that the chamber lacked standing to file the lawsuit and that halting implementation of the program would harm the public interest.
Separate lawsuits have also been filed by PhRMA, the pharmaceutical trade organization, as well as individual companies including Merck and Bristol Myers Squibb. The negotiation plan has garnered harsh words in addition to legal action, with Pfizer CEO Albert Bourla, DVM, PhD, calling the effort “negotiation with a gun to your head.”
Policy experts’ views of the negotiation efforts have been more positive, although nuanced. Dennis P. Scanlon, PhD, professor of health policy and administration at the Pennsylvania State University, told The American Journal of Managed Care® (AJMC®) that although negotiation will need to allow enough profit to fund pharmaceutical research and development, the plan is “a step in the direction of using ultimately the purchasing power of the federal government through the Medicare program to be able to get better pricing and discounts for seniors.”
A. Mark Fendrick, MD, co–editor in chief of AJMC and director of the V-BID Center at the University of Michigan, noted in late 2022 that “there is great consternation and a lot of uncertainty regarding how the Medicare negotiations might happen,” including whether commercial plans will shift their reimbursement for prescription drugs in lockstep with Part D or in the opposite direction.