A top Biden administration official planning Medicare’s first drug-price negotiations is talking directly with pharma executives and consulting with other agencies that buy medications for the government to begin hammering out details of the new policy.
(Bloomberg) — A top Biden administration official planning Medicare’s first drug-price negotiations is talking directly with pharma executives and consulting with other agencies that buy medications for the government to begin hammering out details of the new policy.
Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure didn’t name which chief executive officers she’s met with but said the conversations have been collaborative. Her comments contrast with the drug industry’s confrontational public stance against the policy.
“It has to be a collaborative process because manufacturers absolutely have leverage and the ability to negotiate with us,” she said Thursday in an interview. “The door is open and the manufacturers seem to be walking through it.”
CMS is writing details to implement price negotiations passed in President Joe Biden’s Inflation Reduction Act, the biggest change to Medicare prescription benefits in two decades. The law overhauled how the Medicare program that covers 65 million older and disabled Americans will pay for the most costly medications. CMS plans to identify the first 10 drugs subject to negotiations by Sept. 1, and the negotiated prices will take effect in 2026.
It’s new ground for Medicare. Since the program began covering prescription medications 20 years ago, it’s relied on private drug benefit plans to negotiate prices for drugs. The proposal for Medicare to bargain directly has faced intense pushback from the pharmaceutical industry, which argued that it would amount to price-setting and discourage companies from investing in some new therapies.
The law passed last year in a policy triumph for Biden and congressional Democrats. Now it’s up to CMS to craft the details.
Brooks-LaSure said she’s consulting with other parts of the federal government that already negotiate for medications, including the Department of Veterans Affairs and the Indian Health Service.
“We really wanted to understand their experience and have relied on them for expertise,” she said. “This negotiation is new to CMS but it’s not new to the companies, and we are drawing on the experiences of the private sector as we think about the process.”
CMS released a memo detailing parts of the policy last month, with a 30-day window for comments that closes April 14. Brooks-LaSure said the agency would “pivot based on comments from stakeholders.”
The agency expects to finalize guidance by early July. In June it will also begin analyzing data that will determine which medications are subject to the first round of negotiation. The drugs must be among the top-selling products without competition from generic or biosimilar versions.
Read more: J&J, Amgen, Regeneron Drugs Likely to Face Medicare Negotiation
CMS wants to balance incentives for innovation with getting the best deal for taxpayers and Medicare beneficiaries, Brooks-LaSure said. But some elements of the policy are set in statute and beyond the agency’s discretion to modify. Drug industry groups have said provisions that protect complex biologic drugs from negotiations longer than small molecules could discourage investment in those products.
“We certainly are always trying to think about how to make sure that we’re encouraging innovation,” she said, but “the law is the law and there are so many times when people, stakeholders want us to change things that need to be done congressionally.”
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