Medicare Price Discussions: In the realm of pharmaceuticals, drugmakers are treading carefully when it comes to engaging in price discussions with Medicare. Johnson & Johnson’s Darzalex, a treatment for multiple myeloma, is among the drugs that will not be part of the new U.S. government price discussions for the foreseeable future. This strategic move aims to safeguard their substantial therapeutic revenue.
On Wall Street, as well as among major pharma corporations, a cautious approach prevails as they await the government’s decision on whether adding a chemical component to an injectable therapy would result in the creation of a new medicine. For instance, Merck and J&J are keen on introducing Keytruda, and along with Halozyme Therapeutics, which holds the licensing for a critical injectable component, they assert that the new packaging qualifies the product as a new pharmaceutical entity.
Similarly, makers of Opdivo and Tecentriq, Bristol-Myers Squibb, and Roche, respectively, consider it premature to delve into pricing discussions.
Under President Biden’s IRA (Improving Access to Affordable Prescription Drugs), Medicare now has the authority to disclose prescription prices, with a targeted reduction of 25% in prescription drug spending. With the goal of saving $25 billion by 2031, Medicare is set to price ten medications in 2026, focusing on drugs that are at least nine years old or, in the case of biotech medications, thirteen years old.
As Medicare evaluates and includes unidentified drugs on an annual basis, 2028 will witness the inclusion of health and sickness medications.
The Centers for Medicare and Medicaid Services, which oversees Medicare for nearly 60 million Americans, has not disclosed whether the hyaluronidase medications fall under the category of new pharmaceuticals. However, there are expectations that Medicare will encompass hyaluronidase injections as a means to enhance the efficacy of drugs.
Michael DiFiore, an industry expert, lauds the potential of hyaluronidase injections as an advanced technology that could revolutionize pharmaceutical treatments.
In recent discussions, pharmacies and Medicare explored new terminologies to address security issues through minimal product modifications, indicating a cautious approach toward releasing new medications prematurely. Despite speculation, DiFiore denied that hyaluronidase injections are intended for cancer treatments.
Looking ahead, drugmakers are making billion-dollar bets on their future prospects. In an interview, Johnson & Johnson’s CFO Joseph Wolk projected that the injectable form of Darzalex Faspro would undergo review and authorization in 2033 or 2034. As Darzalex approaches its thirteenth year in 2028, it remains a significant revenue contributor, accounting for 80% of Faspro’s revenue in 2020.
Similarly, Merck’s Keytruda, set for production in two years, will initiate discussions for its inclusion as a thirteen-year-old product in 2028. The revamped Keytruda version is expected to require less treatment for most patients, and it is projected to generate sales of $24 billion, with further estimates reaching $30 billion by 2026.
For San Diego-based Halozyme, hyaluronidase injections may prove instrumental in bolstering their business, having generated $660 million in 2022. Halozyme’s CEO, Helen Torley, underscores Medicare’s role in defining medications and finds the injectable hyaluronidase as a groundbreaking innovation in the pharmaceutical landscape.
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Our Reader’s Queries
What are the 10 drugs that Medicare will negotiate price?
The initial set of 10 medications chosen for the first phase of discussions encompass a range of medical issues such as diabetes (Farxiga, Fiasp/NovoLog, Januvia, Jardiance), blood clots (Eliquis, Xarelto), heart failure (Entresto, Farxiga), psoriasis (Stelara, Enbrel), rheumatoid arthritis (Enbrel), Crohn’s disease (…
Do drugmakers comply with Medicare pricing talks despite lawsuits?
Pharmaceutical companies have agreed to engage in discussions regarding pricing in the Medicare program, despite their attempts to halt the initiative through legal action. The drug manufacturers have agreed to take part in the negotiation of drug prices within the Medicare program.
Which drugs will be negotiated in 2026?
In 2026, the leading medications up for negotiation are anticipated to be anticoagulants Eliquis (apixaban) and Xarelto (rivaroxaban), oral antidiabetics Januvia (sitagliptin) and Jardiance (empagliflozin), the tumor necrosis factor inhibitor Enbrel (etanercept), and the inhalers Symbicort (budenoside/formoterol) and Breo Ellipta (…
What is the most expensive drug for Medicare?
The total amount spent on the top 10 Medicare Part D drugs in 2021 varied from $2.6 billion for Ozempic, a diabetes medication, to $12.6 billion for Eliquis, a blood thinner.