Inflation reduction act - prices negotiation

Pricing & Reimbursement
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Dear everyone,
I have been informed that 2024 is expected to be the inaugural year for negotiating drug prices in the USA due to the Inflation Reduction Act. I am curious to know if there are any limitations on which drug prices can be negotiated. Additionally, has it been determined which drug prices will be subject to negotiation this year?

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Hi, there is actually quite a few drugs excluded from negotiations. Those are:

  • Drugs that have a generic or biosimilar competitor,

  • Drugs that are less than 9 years (for small-molecule drugs) or 13 years (for biological products) from their FDA-approval or licensure date,

  • “Small biotech drugs” (until 2029), defined as those which account for 1% or less of Part D or Part B spending and account for 80% or more of spending under each part on that manufacturer’s drugs,

  • Drugs with Medicare spending of less than $200 million in 2021 (increased by the CPI-U for subsequent years),

  • Drugs with an orphan designation as their only FDA-approved indication,

  • All plasma-derived products.

Unfortunately currently there is no public list with drugs, which will be negotiated this year.

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Hello,
Actually, last year, CMS announced the first 10 drugs covered under Medicare Part D, selected for negotiations. The negotiations should take place in 2023 and 2024, and the agreed prices will become effective in 2026. You can find the list of drugs selected for the first round of negotiations here: Factsheet: Medicare Drug Price Negotiation Program (cms.gov). They are ranked according to highest total Part D gross covered prescription drug costs.

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