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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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