Drug companies face Medicare price negotiation deadline

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The Centers for Medicare and Medicaid Services (CMS) set an Oct. 1 deadline for companies to either agree to bargain with the federal government over pricing or face penalties.


Given the two options available to those who decide against bargaining — a heavy excise tax or withdrawing all their products from Medicare and Medicaid coverage — some have already said they plan to sign agreements, even though they are suing to stop it.


“We remain committed to ensuring patients have access to FARXIGA and plan to participate in the process outlined by CMS to communicate the value of FARXIGA to people covered by Medicare,” a spokesperson for AstraZeneca said.


Merck said it would be signing the agreement “under protest.”


“Withdrawing all of the company’s products from Medicare and Medicaid would have devastating consequences for the millions of Americans who rely on our innovative medicines, and it is not tenable for any manufacturer to abandon nearly half of the U.S. prescription drug market,” said Merck.


A spokesperson for Bristol Myers Squibb similarly said the company has “no choice other than to sign the ‘agreement.’”

AstraZeneca’s diabetes drug Farxiga, Merck’s Type 2 diabetes drug Januvia and Bristol Myers Squibb’s Eliquis were among the first 10 drugs chosen by the Biden administration last month.


Others were more ambiguous on their plans.


Novo Nordisk said it would “continue to explore all options that allow us to drive change for people that need it and strive to continue to bring innovative medicines to the market while helping increase access for those that need them” when asked about its intentions.


There was a chance that the companies could have avoided negotiating for a little longer, but a ruling from a federal judge on Friday dashed any hopes of that happening.


The Chamber of Commerce, one of many groups suing to stop the program, had requested a preliminary injunction on the process by Oct. 1.


But U.S. District Judge Michael J. Newman found in his ruling on Friday that the organization had failed to prove that an injunction was necessary.


“They have demonstrated neither a strong likelihood of success nor irreparable harm. Consequently, their request for immediate preliminary injunctive relief—to stop implementation of the Program on or before October 1, 2023—is denied,” wrote Newman.


With this ruling in place, the Medicare negotiation program can go forward as planned.

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