The Centers for Medicare and Medicaid Services (CMS) announced the first 10 prescription drugs eligible for price negotiations with the government. The list follows a negotiation plan that is part of the Inflation Reduction Act of 2022, under which new prices will go into effect in 2026.
CMS selected the following drugs for price negotiations:
- Insulin aspart
In a fact sheet about the negotiation selections, CMS explained the drugs were chosen based on several factors. First, potential qualifying single-source drugs with no generic or biosimilar competition were identified.
Second, orphan drugs, plasma-derived products, and low-spend Medicare drugs were excluded from the list. CMS also identified which drugs were negotiation-eligible based on the 50 single-source drugs with the highest total Part D gross covered prescription drug costs.
These drugs were then ranked by highest total Part D gross covered prescription drug costs and narrowed to a list of 10, excluding those that are expected to have a biosimilar hit the market soon.
Together, the 10 drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs between June 1, 2022, and May 31, 2023.
The process for the first round of negotiations will involve multiple steps, said CMS.
Companies with a selected drug submitted data on the medication to CMS. After data submission, companies met with CMS to discuss the data. CMS also held public patient-focused listening sessions for each selected drug.
By February 2024, CMS will provide companies with a proposal for the maximum fair price of the medication in addition to a justification for said price. Each company will have 30 days to accept the offer or provide a counteroffer.
The negotiation period will end August 1, 2024. If an agreement has not been reached by then, companies will be invited for up to three additional negotiation meetings.
Source: CMS, August 2023.