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Pharmaceutical Manufacturers Taking Part of Medicare Drug Price Negotiations

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1 minute read

The Inflation Reduction Act allows the federal government to negotiate directly with drug manufacturers to improve access to several costly brand-name drugs. Despite legal challenges, four major drug manufacturers are participating in Medicare price negotiations with the Centers for Medicare and Medicaid Services (CMS).

Participation in the price negotiation program is voluntary but for those who don’t participate they may have to pay an excise tax or withdraw their products entirely from the Medicare/Medicaid markets.

The four major participants are:

  • Merck (Januvia, for treating diabetes)
  • Boehringer Ingelheim (Jardiance, for treating diabetes and heart failure)
  • Bristol Myers Squibb (Eliquis, for preventing and treating blood clots)
  • AstraZeneca (Farxiga, for treating diabetes, heart failure, and chronic kidney disease)

Amgen, Novartis, Novo Nordisk, and Johnson & Johnson have not joined and missed the October 1st deadline to participate.


What’s Next?

The lengthy negotiation process to discuss the first round of drugs will continue until August 1, 2024. The CMS will send an initial offer for each selected drug no later than February 1, 2024, and drugmakers will have 30 days to respond.

Employers should continue to monitor health care trends, spending, and utilization. Download the bulletin for more details.

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Steve Smith

Steve Smith

Steve Smith, Employee Benefits Consultant for National Insurance Services, has his energy level permanently set at “high.” His maxim is “work hard, play hard.” Steve’s an expert in getting groups of people working together for a higher cause. Minnesota schools, cities, and counties rely on Steve’s unique and creative ideas of engaging employees in their own health and wellness to lower utilization trends. He has 20+ years in the health insurance field doing compliance, cost mitigation, utilization, analytics, wellness plans, and strategic planning. Steve is a licensed insurance agent and holds the designations for Managed Healthcare Professional (The Health Insurance Association of America), Certified Patient Protection and Affordable Care Act Professional (National Association of Health Underwriters), and Group Benefits Disability Specialist (Hartford School of Insurance). He specializes in Employee Benefits Consulting for Minnesota schools, cities, and counties including fully insured, self-insured, and stop-loss plans.