New actions and research from U.S. Department of Health and Human Services highlight how President Biden’s administration can lower prescription drug costs

The new report provides an in-depth review of 10 drugs participating in the first round of Medicare drug price negotiations under President Biden’s Inflation Reduction Act (IRA).

As part of its efforts to lower prescription drug prices for older Americans and people with disabilities, the U.S. Department of Health and Human Services (HHS) today released a new report that provides an in-depth review of 10 drugs selected for the first cycle of President Biden’s Medicare drug price negotiations under the Inflation Reduction Act (IRA). This report from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) reviews common conditions selected to treat with drugs, including the major health disparities associated with these conditions. The report explores current use and spending trends for these 10 drugs over a 5-year period. Additionally, the new study details whether the drugs received certain types of federal donations and support for their development.

Thanks to President Biden’s low-cost prescription drug law, Medicare finally has the ability to negotiate fair drug prices for Medicare plans and those who rely on the plan. Secretary Becerra said some of these drugs were developed with taxpayer support and we should reap the benefits of that investment by not having to pay high prices for prescription drugs. These new data show exactly why negotiations are so important to hard-working Americans. My administration is committed to making health care more affordable and accessible.

Rebecca Haffajee, principal deputy assistant secretary of ASPE, added that the top 10 drugs account for nearly 20% of Medicare Part D drug benefit spending. Price negotiations for these drugs have the potential to generate significant savings for enrollees, taxpayers, and Medicare. The benefits of negotiation will continue to grow as more drugs are selected for negotiation in the coming years.

The study found that total spending on the 10 prescription drugs negotiated by Medicare Part D more than doubled from 2018 to 2022. Spending growth for these 10 drugs was more than three times the growth rate for all Part D drugs over the past decade. same period. The report found that seven of the 10 drugs selected for negotiations received at least one form of federal support for their drug development or utilized federally funded inventions.

In addition, the Centers for Medicare and Medicaid Services (CMS) released a list of 48 prescription drugs that are eligible for B due to the inflation rebate provisions of the Inflation Reduction Act between January 1, 2024, and March 31, 2024. Coinsurance may be lower for some beneficiaries. By law, companies whose drug prices rise faster than inflation must pay rebates to Medicare. Starting Jan. 1, 2024, some Medicare enrollees taking these 48 drugs could save an average of $1 to $2,786 per dose, depending on individual coverage.

Also today, CMS released revised guidance for the Medicare Prescription Drug Inflation Rebate Program, detailing key requirements and procedures for invoicing manufacturers who owe Medicare rebates. In addition to this guidance, CMS today wrote a letter to leading insurance companies and pharmacy benefit managers encouraging them to ensure adequate payment and access to vaccines, including COVID-19 and RSV; working with all pharmacies Adopt sustainable and equitable practices; review their processes and systems to ensure they provide comprehensive preventive services and other requirements without cost sharing.

To supplement this latest release, ASPE also released a fact sheet detailing which drugs and biologics meet the criteria for triggering a coinsurance adjustment under the Medicare Part B inflation rebate provision of the Inflation Reduction Act for calendar year 2023. In 2023, Medicare covers 47 drugs with Part B lower coinsurance rates for at least one calendar quarter due to inflation-adjusted rebate payments. Medicare enrollees’ coinsurance amount per average dose may be as much as $618 lower than what they would pay without the coinsurance adjustment.

Finally, the Administration for Strategic Preparedness and Response (ASPR) is making fair pricing a standard part of contract negotiations to develop or purchase medical products as part of its commitment to obtain the best value for American taxpayers. In September 2023, ASPR finalized a contract agreement for its NextGen program for a potentially life-saving COVID-19 treatment being developed by Regeneron, which stipulates that if the product is commercialized, its list price in the United States will be equal to or lower than Its retail price in the United States. Comparable global markets. ASPR has since included similar language in recent agreements with CastleVax, Codagenix and Gritstone Bio, the developers of the first three vaccines selected for development in the NextGen program. These terms would be effective if the Company’s vaccine candidate is selected to enter an ASPR-supported Phase 2b trial to evaluate clinical safety and efficacy. These actions are the result of successful collaboration between ASPR and its industry partners and demonstrate HHS’s commitment to preventing Americans from paying unfair prices for the care they need.

Taken together, these measures will reduce Americans’ out-of-pocket costs, especially for seniors and people with disabilities who rely on Medicare prescription drug coverage for life-saving medications, while also saving the Medicare program money due to reduced inflation.

Key points from the ASPE report include:

  • The 10 drugs covered by Part D in Medicare’s first round of drug price negotiations are: Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara and NovoLog/Fiasp. Millions of Medicare beneficiaries take one or more of these drugs to treat serious conditions such as blood clots, diabetes, cardiovascular disease, heart failure, autoimmune diseases and chronic kidney disease.
  • The federal government, particularly the National Institutes of Health (NIH), supports biomedical research related to the discovery and development of new drugs. Seven of the 10 drugs selected for negotiation received at least one form of federal support for their drug development or utilized federally funded inventions.
  • Under the IRA, selected drugs need to be approved or licensed by the U.S. Food and Drug Administration (FDA) for a considerable amount of time before they are eligible for negotiation: Enbrel has been licensed the longest (nearly 25 years as of September 1) The list of 10 drugs selected for the first round of drug price negotiations in 2023 needs to be announced), and Entresto has been approved for the shortest time (about 8 years as of September 1, 2023).
  • Total Medicare Part D drug spending on selected drugs in 2022 will be $46.4 billion, accounting for approximately 19% of total Part D spending in 2022. Total annual expenses per insured person were highest for Imbruvica ($129,000) and lowest for NovoLog/Fiasp ($3,300) in 2022.
  • From 2018 to 2022, total Medicare Part D spending on 10 selected drugs more than doubled, from about $20 billion to about $46 billion, a 134% increase. The spending growth rate for these 10 drugs was more than three times that of all Part D drugs during the same period.
  • Overall, for covered persons who take at least one selected drug, spending on selected drugs represents approximately 52 percent of the average annual out-of-pocket cost per insured person for all Part D-covered drugs.
  • More than 5 million Medicare enrollees say they have trouble affording prescription drugs, with Black and Latino enrollees reporting affordability challenges at rates about 1.5 to 2 times higher than white enrollees.

The full HHS report, “Medicare Drug Price Negotiation Program: Understanding Developments and Trends in Utilization and Spending for Select Drugs,” is part of the ongoing Inflation Reduction Act series and is available at https://aspe.hhs.gov /reports/ira-.Study Series Medicare Drug Price Negotiation Program

The CMS Inflation Rebate Revised Guidance Fact Sheet is available at https://www.cms.gov/files/document/fact-sheet-medicare-prescription-drug-inflation-rebate-revised-guidance.pdf.

CMS reduces coinsurance for certain Part B rebateable drugs (January 1-31, 2024) fact sheet, visit https://www.cms.gov/files/document/fact-sheet-part-b -coinsurance-q1-2024.pdf

CMS Medicare Part B Inflation Rebate Program Revised Guidance is available at https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf.

CMS Medicare Part D Inflation Rebate Program Revised Guidance is available at https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-revised-guidance.pdf.

CMS’s letter to plan and pharmacy benefit managers is available at https://www.cms.gov/newsroom/fact-sheets/cms-letter-plans-and-pharmacy-benefit-managers.

The ASPE fact sheet detailing which drugs and biologics meet the criteria included in the Medicare Part B inflation rebate provision for calendar year 2023 is available at https://aspe.hhs.gov/reports/ira- research-series-Medicare Part B Inflation Rebate.

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