We May Not Negotiate Prices for Ten Drugs After All

[Celerity]

Rules that exempt drugs from Medicare negotiation if there’s ‘meaningful’ generic competition could whittle down the effect of the program.

https://prospect.org/health/2023-09-11-we-may-not-negotiate-prices-for-ten-drugs-after-all/

The Centers for Medicare & Medicaid Services cannot select a drug for negotiation until seven years after its launch for small-molecule drugs, and up to 11 years after launch for so-called “biologics.”

The day that the Biden administration revealed the first ten drugs under its Medicare price negotiation process, the companies that own and market those drugs saw their stock prices go up. “Today is a nonevent,” said one industry analyst. Part of this is because the actual negotiated prices won’t take effect until 2026, too far in the future for Mr. Market to blink an eye. But there’s another factor that has been highlighted: Some of the drugs are going to face generic competition before we ever get to 2026. If that competition is legitimate, those drugs will no longer be eligible for price negotiation. And under the rules of the law, the administration can’t select another drug to get the number back up to ten.

All that means that the ten drugs being negotiated could be whittled down to eight, or six, or even fewer. To the average senior, it doesn’t matter if their prescription prices go down because of a new generic on the market or because of a government negotiation. And if the program makes it harder for drug companies to avoid competition, that’s certainly positive. But there’s an opportunity cost here. If drugs were already scheduled for competition and they’re put in the negotiation bucket, the result could be fewer drugs with their prices forced downward.

The real problem is that those deciding what drugs to negotiate on are hemmed in by the terms of the law. The Centers for Medicare & Medicaid Services (CMS) cannot select a drug for negotiation until seven years after its launch for small-molecule drugs, and up to 11 years after launch for so-called “biologics.” In the future, this will incentivize higher launch prices, so drug companies can make back their investment early before the government can react. For now, the three-year lag between the negotiation announcement and the prices taking effect makes it difficult to choose the most outrageously priced drugs while making sure that they won’t face generic competition before negotiations are complete.



One tactic the drug companies might use is to invite “competition” in name only, for a generic alternative that isn’t heavily marketed or priced aggressively, in order to ward off negotiation. This is where regulation from CMS will really matter. “CMS is being very clear in articulating that they will be critical about ensuring that bona fide marketing is actually taking place,” said Steve Knievel, an advocate with Public Citizen’s Access to Medicines program. CMS won’t “consider it sufficient [just] for a product to have a generic or a biosimilar that has received approval from FDA.”

snip

[leftstreet]

1. Shocking n/t

[jimfields33]

5. Who decided on 2026? That was not very smart.

[LymphocyteLover]

7. the same geniuses who decided to phase in Obamacare only after several years.... giving Republicans

time to run against it and sabotage it before the benefits were clear

[jimfields33]

14. Wonderful. A bunch of genius'

[Silent Type]

8. I think the drug legislation was written by Biden staff and CMS administers the

program. While I’m sure they had to make some compromises to appease GOPers, this is a Democratic program. While it might not appear to be effective right now, just getting negotiations enacted was a big Fing deal.

[Celerity]

9. The bill was written to allow negotiations to happen in 2023 and 2024, then the new prices

to take effect in 2026. I suspect that Manchin and Sinema played some role in that delay.

also, some parts of the price reductions were denied by the Senate parliamentarian


Drug-Price Bill Pruned by Senate Arbiter in Partial Industry Win

https://archive.ph/Ih7WN

[Hermit-The-Prog]

12. Solution: elect more Democrats.

There would still be compromises, but the starting point would be much, much better.

[Hortensis]

13. Well, it's MEANT to be, but should we be shocked by it?

This post called out the headline's deception in the first sentence. A huge warning sign.

First the claim that negotiation Biden PROMISED may not happen after all. (Btw, just maybe that the WH announced there would be negotiations should have some credibility?)

Then, oh! Now it's that negotiations may "whittle down" what negotiation will accomplish.

Disclosure: I stopped reading at that point. Opportunity cost: What honest, nonpolitical information sources could I be reading instead?

[global1]

2. A Question And Some Comments.....

What would take so long that this negotiation is being pushed out to 2026?

Also - information is available to know what drugs will be coming off patent and when.

Why wasn't this checked before drugs that are coming off patent and would face competition between now and 2026? Maybe they didn't have to include those drugs on this list of 10.

There are a myriad of drugs that are expensive - that prices can be negotiated with - that will remain on patent and face no generic competition well after 2026 that can be considered and added to this list.

Something about this just doesn't set well with me. Why can't these negotiations proceed faster?

Who is doing this negotiation with Pharma?

[MutantAndProud]

3. FFS someone slap them with a dictionary please

How about generic meaningfulness being gauged by the price difference. Over ~$500 a dose is a “luxury” or “deluxe” or “premium” drug

[unblock]

4. In my experience, "competition" from generics can be a cruel joke.

I got imitrex for migraines when it was the only drug of its kind available. When a generic equivalent was soon to come out, they started hiking prices, supposedly to cash out before the clock ran out on their monopoly.

Then when generic sumatriptan finally came out, both it and imitrex were *even higher* than the peak where imitrex ended up right before the generic came out.

Since then, brand competitors have come out, such as zomig. All still the same price or higher.


It's a pretty stupid idea to apply market forces to health care in the first place, never mind how thoroughly corrupted the "market" in healthcare is. Monopolies, trusts, and big decisions made by employers and insurance companies lead to a serious distortion of true market forces.

[LymphocyteLover]

6. Sigh....

[Hortensis]

10. Or we will. American Prospect? Consider the source.

INDUSTRY analyses are far more reliable than political factional. And nothing's simple or quick to accomplish against the intense opposition we face from all sides, including nature itself, or we'd have done it all long ago and retired to the beach.

It's a shame, kind of like gravity though in that it's always with us, that some far left groups that claim to be progressive are dependent on Democratic Party failure for validation of their oppositional political identity. They can't fix their destructive problem any more than we can.

Sadder still that so many people (very few comparatively, but still!) have a personal emotional need for the Democratic Party to fail to achieve our progressive goals.

Read and consider this thoughtfully as part of an informative mix, but don't stop there any more than RWers should read the WSJ's editorial analyses and stop there.

[FSogol]

15. Well said. n/t

[Voltaire2]

11. If it got through the senate it was compromised.

That is the reality of a single vote majority with two well known corrupt actors.

[mopinko]

16. according to amy klobachar

there is another bill to deal w generics.
it’s to stop the big companies from basically bribing generic makers to stay out of the market, and to stop the ‘evergreening’ making tiny changes to restart patent protection.