Major Drug Companies Agree to Price Negotiations With U.S. Government
By Cara Murez HealthDay Reporter | Copyright © 2022 HealthDay. All rights reserved.
TUESDAY, Oct. 3, 2023 (HealthDay News) -- Pharmaceutical companies that make the 10 prescription drugs chosen to be the first for price negotiations for Medicare patients have agreed to talks with the government.
The Biden administration announced Tuesday that the drugmakers, including Merck, Bristol Myers Squibb and Johnson & Johnson, will take part in price negotiations despite ongoing lawsuits over this same requirement, NBC News reported.
This negotiation is a component of the Inflation Reduction Act, which allows Medicare to work with the drug companies to reduce prices for older Americans. Negotiations are to occur next year with resulting prices going into effect in 2026.
Last year, about 9 million Medicare enrollees paid $3.4 billion out of pocket for these 10 specific drugs, NBC News reported.
Additional drugs will later be added to negotiations.
The federal government had given manufacturers one month to decide if they would participate in talks or face tax penalties, NBC News reported. Drugmakers could avoid the penalty if they removed their drug from the Medicare program, but that, too, could be costly.
Companies who are suing, including Merck and Johnson & Johnson, have said that allowing negotiations could affect their profits and as a result, spending on research and development.
Medicare provides health insurance to more than 65 million older Americans.
The AARP has more on prescription drug prices and older adults.
SOURCE: NBC News, Oct. 3, 2023