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You are here: Home / Articles / How the U.S. Will Set Up New Medicare Drug Price Talks

How the U.S. Will Set Up New Medicare Drug Price Talks

September 6, 2022 • By Ahmed Aboulenein

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WASHINGTON—The U.S. government will soon begin hiring experts and collecting the data needed to launch direct negotiations over prescription drug prices for older and disabled people, a top Biden administration official told Reuters.

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President Joe Biden last week signed into law the Inflation Reduction Act, introducing new policies to tackle climate change, taxes and the rising cost of medicines.

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The Act will for the first time allow the federal Medicare health plan for people age 65 or older and the disabled to negotiate prices on up to 20 drugs a year. It also sets limits on drug price increases for Medicare and caps out-of-pocket costs for those enrolled in the program.

The move represents a rare legislative defeat for the powerful pharmaceutical industry and sets a precedent for curbing drug prices in the world’s most lucrative market for medicines. Read full story

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“We definitely are looking to increase our expertise,” Chiquita Brooks-LaSure, administrator of the U.S. Centers for Medicare and Medicaid Services, said in an interview. “This has been a long time coming, for the federal government and Medicare to have this authority.”

Ms. Brooks-LaSure said she plans to create a new team tasked with negotiating drug prices within the Center for Medicare. CMS says it expects to start hiring for over 100 positions beginning this fall.

“We are really looking for clinical expertise … as well as people who have experience negotiating,” said Ms. Brooks-LaSure, whose agency has regulatory oversight of nearly all healthcare providers in the United States and control of federal health programs covering 170 million people, including 64 million enrolled in Medicare.

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“One of the first things is for us to choose which drugs to negotiate. We have 10, and that is something that we’ll be announcing next fall, so around a year from now,” she said.

CMS will need to collect data from pharmaceutical manufacturers, health insurers and pharmacy benefit managers (PBMs) to identify those first 10 drugs that will be subject to negotiations, a list that will rise to 20 by 2029, she said.

Data Collection

The government will choose from 50 high-spend drugs based on Medicare utilization and cost that have only one supplier. Healthcare analysts have said that list could include Bristol-Myers Squibb Co’s BMY.N top-selling cancer drug Revlimid, AbbVie Inc’s rheumatoid arthritis drug Humira, and blood thinner pill Xarelto which is sold by Johnson & Johnson in the U.S.

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Filed Under: Drug Updates, Legislation & Advocacy Tagged With: CMS, drug pricing, Inflation Reduction Act, policy, U.S. Centers for Medicare and Medicaid Services (CMS)

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