After the U.S. government last month floated its first offers for 10 drugs on Medicare as part of the negotiations process laid out in the Inflation Reduction Act (IRA), the pricing talks are now in full swing.
Every drugmaker with a product on the list has responded to the government’s Feb. 1 pricing offer with a counteroffer, the Department of Health and Human Services (HHS) said in a Monday press release.
The agency is pleased with the “good-faith, up front negotiations,” HHS Secretary Xavier Becerra said in the release. “We are committed to constructive dialogue and are glad the drug companies are coming to the table.”
The industry, for its part, has routinely voiced complaints about a "lack of transparency" behind the process, among its many other objections to the 2022 law.
Now, the back-and-forth is set to continue over the next few months. If the companies and the HHS reach an agreement on a maximum fair price by the end of the negotiation period, or Aug. 1, the new prices will be published Sept. 1 and take effect starting in 2026.
Johnson & Johnson, Bristol Myers Squibb, Merck & Co., Novartis, Eli Lilly, AstraZeneca, Novo Nordisk and Amgen each sell products on the HHS' list of the first 10 meds up for Medicare price negotiations.
Many companies, both on and off the list, have voiced protests about the IRA’s price-fighting measures. Several, including Johnson & Johnson, Merck, Bristol Myers Squibb and Novo Nordisk, have even taken to the courts to challenge the law.
The lawsuits have so far fallen flat. A Delaware court recently threw out AstraZeneca's case, which centered on the 1983 Orphan Drug Act and the Administrative Procedure Act, as well as alleged constitutional violations.
Prominent industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) saw its lawsuit tossed out, as well, based on a lack of “subject matter jurisdiction,” Judge David Ezra wrote in the Texas court's dismissal last month.
The PhRMA case was dismissed “without prejudice,” so it could be refiled.