This audio is generated automatically. Please let us know if you have any comments.
The federal government announced the next 15 medications for which it will seek price reductions with the help of Medicare’s new bargaining power, including the breast cancer drugs Kisqali and Verzenio and the HIV treatment Biktarvy. Those cuts, which are allowed through the Inflation Reduction Act, will take effect in 2028.
Also included in the third annual round of price negotiations were rheumatoid arthritis drugs Orencia, Cimzia and Xeljanz, as well as Botox when used for therapeutic purposes such as migraines. The Centers for Medicare and Medicaid Services designated these drugs for price negotiations under IRA provisions intended to limit spending on drugs associated with the program’s highest costs.
Combined, the 15 drugs represent 27 billion dollars in Medicare spending and are used by about 1.8 million enrollees. Eli Lilly’s weekly GLP-1 diabetes injection, Trulicity, is associated with $4.9 billion in annual costs, the highest of any drug on the list.
“CMS is taking aggressive steps to target Medicare’s most expensive drugs, negotiate fair prices, and ensure the system works for patients, not special interests,” CMS Administrator Mehmet Oz said in a statement. “This approach generates real savings while strengthening accountability across the program.”
For the first time, these negotiations will include drugs covered by your Part B program, which involves drugs administered in a doctor’s office or other health care facility. Orencia, Cimzia and Botox are three examples.
However, two key drugs that were previously expected to feature on this year’s list – the widely used cancer immunotherapies Keytruda and Opdivo – were left off. The inclusion of both was delayed at least a year due to provisions of the One Big Beautiful Bill, which changed the shape The IRA program applies to certain medications.
As a result, price cuts will be “immaterial” for most companies whose drugs are on the list, according to Leerink Partners analyst David Risinger. The only exception is Biktarvy, which has Medicare revenue that could account for 8% of Gilead Sciences’ sales in 2027, Risinger wrote in a note to clients.
The exposure for all other companies involved amounts to 3% or less of total revenue, Risinger wrote.
However, industry group Pharmaceutical Research and Manufacturers of America criticized the announcement. the group argued that The IRA is “undermining future medical progress” by discouraging investment in new drugs, particularly chemical or “small molecule” drugs, drugs that are subject to IRA price negotiations before biological drugs.
“CMS is now planning to set prices for additional small molecule cancer treatments that would otherwise be spared without this penalty, further shifting investment away from these critical treatment options,” Elizabeth Carpenter, the group’s executive vice president of policy and research, said in a statement.
The first round of price negotiations, held in 2024, came into effect this year.
