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NEWS

By Michael Erman, Patrick Wingrove and Ahmed Aboulenein

NEW YORK/WASHINGTON (Reuters) – The blood thinner Eliquis from Bristol Myers Squibb, Pfizer’s breast cancer drug Ibrance and AbbVie’s leukemia treatment Imbruvica are likely to be among 10 big-selling medicines subject to U.S. price negotiations for 2026, according to five Wall Street and academic analyses shared with Reuters.

Last year Congress passed the Inflation Reduction Act (IRA), giving the U.S. government power to start the first price negotiations over prescription drugs for its Medicare health program covering more than 60 million Americans, most over age 65.

The government will launch the negotiation process in September by naming the first drugs it plans to target. They are expected to be the 10 pharmacy-based prescription drugs it spends the most on for the year ended May 2023.

For months, lobbyists for the biggest pharmaceutical companies have been meeting with Medicare officials trying to game out which drugs the government will choose, what discounts they will seek, and ways to redress the final price.

Five lobbyists told Reuters they have been given little information beyond what has been publicly disclosed.

The U.S. Centers for Medicare and Medicaid Services (CMS), which will run the negotiation process, said in a statement it expects to answer some of the industry’s questions in a guidance document it will circulate this spring. A spokesperson said the agency intends to use feedback from monthly calls with drugmakers to inform implementation.

For individual companies, the financial impact is expected to vary. The nonpartisan Congressional Budget Office estimates that negotiations will save the government around $4.8 billion in 2026 and nearly $25 billion a year by 2031, as more drugs are added to the negotiation process.

Those savings will help fund the bill’s out of pocket spending caps and reduced cost sharing for older Americans.

We couldn’t have the other parts of the IRA without this Medicare negotiation,” said Sean Dickson, director of the West Health Policy Center, a non-partisan healthcare think tank.

Reuters compiled five lists prepared by Wall Street analysts and academics with a total of 27 drugs across them.

Eliquis, which Bristol Myers shares with Pfizer, Ibrance, and Imbruvica, sold by AbbVie and Johnson & Johnson, appear on every list.

Novo Nordisk’s diabetes drug Ozempic, prostate cancer treatment Xtandi from Astellas Pharma and Pfizer, and J&J’s blood thinner Xarelto are on three of the lists.

The lists differ because each analyst has their own projections for drug sales, and it is not certain if the government will consider gross sales or net sales after market discounts.

MAKING THE CASE

Bristol Myers Chief Commercialization Officer Chris Boerner said in an interview last month that Eliquis may well be in the government’s crosshairs. We would anticipate that you could potentially see price setting by the government with Eliquis,” he said.

Astellas said it was analyzing information from CMS to understand its potential impact. Pfizer, Novo Nordisk and J&J declined to comment on the likelihood their drugs would be included in the first round of negotiations. AbbVie did not respond to request for comment.

Medicare is the biggest single purchaser of drugs in the country, reimbursing private companies and hospitals for medications used by individuals covered by the program.

Under the new law’s process, the government will publish its list of the first 10 drugs for negotiation from the pharmacy-based prescription drug program called Part D on Sept. 1.

Drugmakers will have to submit data making the case for each treatment’s value by Oct. 2, including whether the drug represents a therapeutic advance and if it serves unmet medical needs.

Drugmakers have long presented similar value-based arguments in negotiations with private buyers and European governments.

Three industry lobbyists told Reuters they are pressing Medicare officials to commit to a process under which it will reveal how the government arrived at a final price, and have asked for a framework for resolving disputes.

Without such a process, drugmakers could resort to lawsuits as a last-ditch attempt to stop government price setting – even though the IRA exempts the process from lawsuits, two of those lobbyists said.

One of those lobbyists suggested adoption of an appeal process similar to ones used by European countries, where price-setting regimes have long existed, would give companies recourse outside of lawsuits.

A Medicare spokesperson declined to say if the agency was considering such a move.

Steven Pearson, president of the Institute for Clinical and Economic Review (ICER), an influential research group that does drug pricing value assessments, said how the government comes to a price based on data companies submit should be clearly communicated.

It’s going to be frustrating to a lot of people,” he said, “if, at the end of the day, we don’t really understand how this information is being interpreted and applied to a final decision.

 

(Reporting by Michael Erman and Patrick Wingrove in New York and Ahmed Aboulenein in Washington; Editing by Caroline Humer and Bill Berkrot)

 

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