Which Ten Medicines Will Be Medicare’s First Drug Price Negotiation Targets?

Numerous groups are trying to determine which of Medicare’s high-cost medicines will be the first targets of the Inflation Reduction Act’s drug price negotiations in 2026. On March 13, Reuters published a list based on a Wall Street consensus. Earlier this month, researchers from the West Health Policy Center in Washington, DC, and Skaggs School of Pharmacy, University of California, San Diego, published their analysis in the Journal of Managed Care and Specialty Pharmacy.

Centers for Medicare and Medicaid Services Headquarters

Figuring prominently on the lists are some small-molecule drugs that treat highly prevalent chronic diseases, including empaglifozin (Jardiance®) and sitagliptin (Januvia®) for the treatment of diabetes, apixaban (Eliquis®) and rivaroxaban (Xarelto®) to prevent blood clots, budesonide/formoterol (Symbicort®) and fluticasone/cilanterol (Breo Ellipta®) to treat asthma. Others include the oncology agents Ibrance®, Xtandi®, and Imbruvica®, as well as the autoimmune agent Enbrel®.

Only Enbrel may have direct, publicly announced biosimilar competition, based on this list. But that will not occur until 2029. If Medicare does decide that Enbrel is one of its first targets for drug price negotiations, it will be subject to at least a 60% minimum discount in Medicare pricing. That leaves an open question as to whether biosimilar competition by Sandoz or Samsung Bioepis will be introduced after the 2029 exclusivity expiration.

Despite the fact that several biologics (including certain insulins) rank highly in total sales, they will not qualify because of biosimilar availability or expected availability. These include aflibercept; denosumab; insulin glargine, aspart, lispro, and detemir; ranibizumab, and ustekinumab.

Apparently, the Centers for Medicare and Medicaid Services (CMS) will begin drug price negotiations at a discounting level that it believes aligns with both the net prices of the drug’s closest competitors and the perception of value that it brings at the time of the negotiation. Ultimately, that value estimate could change between now and when the negotiation takes place, particularly for drugs added to the list later in the decade.

The final list of drugs on Medicare’s price negotiation list will be published by CMS on September 1.   

AbbVie Among First Targeted for Inflationary Rebates

In other news related to the Inflation Reduction Act, the initial list of pharmaceuticals that will be subject to the legislation’s inflationary rebate has been released by CMS. Of 27 part B drugs listed, somewhat surprisingly, AbbVie’s Humira® was the only biologic product on the list that is facing or will face biosimilar competition in the next few years. Humira is more commonly self-injected, and not administered in a provider’s office or hospital, and so would be mostly covered under the part D pharmacy benefit.

The full list of products subject to the inflationary rebate also provides the coinsurance adjustment for inflation that Medicare-eligible patients will pay between April 1 and June 30, 2023. Normally, this would be 20% for the specialty products listed, but for Humira, this figure drops slightly to 19.53%. Overall, CMS states that this will translate to “$2 to $390 per average dose” in savings.

CMS will invoice the manufacturers listed in 2025 for these rebates.

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