Pharmaceutical firms are setting the legal framework to oppose the US intention to negotiate medication pricing for Medicare health coverage.
The Inflation Reduction Act (IRA), a key drug pricing reform of the Biden administration, aims to negotiate drug prices and save up to $25 billion by 2031 for Americans who currently pay more for medicines than any other nation.
Pharmaceutical Companies’ Profits Have Been Cut
According to industry experts, the recently passed Inflation Reduction Act (IRA), aimed at lowering drug prices for American patients, may result in reduced profits for pharmaceutical companies, thereby curtailing the development of innovative treatments.
Starting in September, the Centers for Medicare and Medicaid Services (CMS) will begin the Medicare drug price reduction process by identifying the top 10 most expensive drugs. Negotiations on the first wave of drugs will lead to new prices that will take effect in 2026, potentially resulting in a $4.8 billion reduction in industry sales.
Among the 10 high-selling medicines likely to be subject to negotiations are Bristol Myers Squibb and Pfizer’s blood thinner Eliquis, Pfizer’s breast cancer drug Ibrance, and AbbVie’s leukemia treatment Imbruvica.
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Non-Disclosure Negotiations
Under Medicare’s guidance, drugmakers are prohibited from discussing negotiations and could face daily fines of $1 million for any violations.
Additionally, an expert suggests that the Medicare roadmap, which didn’t go through a formal process with proposed and final rules, may also face legal challenges.
Sources reveal that there are variables that could potentially contradict the law’s restrictions, such as determining whether a medicine is considered negotiable, leading to improper extensions.
They also suggest that the current concept of a single-source drug creates a high hurdle for determining whether a medicine has competition.
Many lawyers representing manufacturers believe that drug companies may seek emergency injunctions to stall government negotiations, while others think that filing a lawsuit could be more than just a delaying tactic.