Drug companies agree to participate in Biden Medicare price negotiation program

All 10 manufacturers of the first drugs selected for Medicare price negotiations will be participating, the White House said Tuesday, even as many of them are currently suing the administration in an effort to halt the process.

Many of the companies told The Hill separately ahead of the Oct. 1 deadline that they would participate. The White House confirmed the news in an announcement, taking a political victory lap.

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

“For decades, Big Pharma fought to block Medicare from directly negotiating lower drug prices for seniors and other Medicare beneficiaries,” the White House said. “President Biden and Congressional Democrats finally beat Big Pharma and allowed Medicare to directly negotiate lower drug prices by passing the Inflation Reduction Act.”

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. 

Sunday was the deadline for the companies to decide whether they wanted to participate in the price negotiation program, and Monday was the deadline for them to submit manufacturer-specific information — such as research and development costs, as well as sales and revenue data — to the administration.

The Centers for Medicare and Medicaid Services will send each company an initial offer by Feb. 1, and the negotiation process will continue until Aug. 1. The negotiated prices won’t take effect until 2026. More companies will be added in the future. 

Drugmakers have been fighting against negotiation since the Inflation Reduction Act passed last year, and there have been at least nine separate lawsuits filed across the country as part of the effort. 

A federal judge last week ruled denied an attempt by the U.S. Chamber of Commerce to temporarily block implementation of the negotiation process, the first time a judge weighed in on the program. But the judge also denied the government’s motion to dismiss the case.

The companies have argued that the negotiation process is unconstitutional and amounts to forced price fixing, which could lead to lower profits, less money invested in research and development and, consequently, fewer drugs on the market. 

The companies said they agreed to participate essentially because they had no choice. 

Manufacturers that don’t want to take part in negotiations can withdraw all of their products from coverage under Medicare and Medicaid, but they would lose a highly lucrative income source.