Drugmakers Agree To Participate For Medicare Drug Price Negotiation With Biden Administration

All ten manufacturers of the first drugs selected for Medicare price negotiations will be participating, the White House said, even though many of them are suing the administration to halt the process.

Last year, about 9 million Medicare enrollees spent $3.4 billion out of pocket on the selected drugs from companies, including Johnson & Johnson JNJ, Merck & Co Inc MRK, Bristol Myers Squibb Co BMY, and AstraZeneca Plc AZN, the White House said.

Other companies taking part in the negotiation include Boehringer Ingelheim, Eli Lilly And Co LLY, Novartis AG NVS, Novo Nordisk A/S NVO, and Amgen Inc AMGN.

The drugs on the list are widely used for treating or preventing common conditions, including heart disease and diabetes. They include blood thinners Eliquis and Xarelto; Januvia, Farxiga, and NovoLog for diabetes; and Enbrel for rheumatoid arthritis. 

The government will start negotiating with the pharmaceutical companies next year, and the negotiated prices will go into effect in 2026. More drugs will be added in the coming years. 

If drugmakers had not complied, they would have faced severe penalties, Reuters noted; they would be obliged to pay taxes ranging from 65% to 95% on their drug sales within the Medicare program or be forced to withdraw all their products from the Medicare and Medicaid programs.

These programs collectively offer health benefits to a staggering 158 million Americans. 

In response to this stringent regulation, at least seven drugmakers have initiated legal action against the U.S. Department of Health and Human Services, the body that supervises the Medicare agency, labeling the procedure as an unconstitutional imposition on pricing.