Next Steps in Medicare Drug Price Negotiations

March 06, 2024

CMS and the U.S. Department of Health and Human Services (HHS) announced that the agencies had received the first counteroffers from manufacturers in the Medicare drug price negotiation program.

The initial counteroffers from all manufacturers follow the government's initial offer last month and a broader federal push to take on drug prices.

“We are committed to constructive dialogue and are glad the drug companies are coming to the table,” said HHS Secretary Xavier Becerra. “These are good-faith, up front negotiations.”

Here’s what you need to know:

• Overall goal:  The drug price negotiations are a central component of the Biden administration’s overall goal to act on the price of prescription drugs.
  • This week the administration announced a “strike force” that will look at pricing practices across sectors, including “prescription drugs and health care, food and grocery, housing, and financial services.”

  • President Biden is expected to discuss the expansion of the program in his State of the Union address.

• Included drugs:  The first selected products are Eliquis (blood clotting), Jardiance (diabetes), Xarelto (blood clotting), Januvia (diabetes), Farxiga (diabetes), Entresto (heart failure), Enbrel (autoimmune diseases), Imbruvica (blood cancers), Stelara (Crohn’s disease), and NovoLog (diabetes).
• Fast fact:  The selected drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs between June 1, 2022 and May 31, 2023.
• Timeline:  Following the initial counteroffer, the two sides will negotiate through the spring and summer. The negotiations follow a period of uncertainty around the drug price negotiations and legal challenges to stop the program from advancing.
  • If the two sides reach an agreement, the new negotiated prices would be published by September 1, 2024, and take effect during 2026.
• Quotable:  “CMS is dedicated to improving access to some of the most expensive drugs for people with Medicare while encouraging market competition and fostering innovation through this first of its kind negotiation process,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

Additional information about the announcement is available online.