Embed from Getty Images
When Democrats passed Biden’s Inflation Reduction Act last year, one of the provisions was that Medicare, for the first time in its history, would be able to start negotiating drug prices directly with the manufacturers. The drug companies have to sign agreements by October 1 to join the negotiations, or else pay a fine. Yesterday, the Biden administration announced the first 10 drugs that are up for negotiation:

Eliquis, made by Bristol-Myers Squibb, is used to prevent blood clotting, to reduce the risk of stroke.

Jardiance, made by Boehringer Ingelheim, is used to lower blood sugar for people with Type 2 diabetes.

Xarelto, made by Johnson & Johnson, is used to prevent blood clotting, to reduce the risk of stroke.

Januvia, made by Merck, is used to lower blood sugar for people with Type 2 diabetes.

Farxiga, made by AstraZeneca, is used to treat Type 2 diabetes.

Entresto, made by Novartis, is used to treat certain types of heart failure.

Enbrel, made by Amgen, is used to treat rheumatoid arthritis.

Imbruvica, made by AbbVie, is used to treat different types of blood cancers.

Stelara, made by Janssen, is used to treat Crohn’s disease.

Fiasp and NovoLog, insulins made by Novo Nordisk.

CNBC broke down more details on the numbers, dates, and lawsuits involved with the new Medicare vs Big Pharma wars negotiations:

A new deal: “Today is the start of a new deal for patients, so big pharma doesn’t just get a blank check at your expense – at the expense of the American people,” Biden said in a speech at the White House on Tuesday. “On my watch, health care should be a right, not a privilege, in this country.”… The drugs listed Tuesday are among the top 50 with the highest spending for Medicare Part D, which covers prescription medications that seniors fill at retail pharmacies. The 10 medicines accounted for $50.5 billion, or about 20% of total Part D prescription drug costs from June 1, 2022, to May 31, 2023, according to the Centers for Medicare and Medicaid Services, or CMS… In 2022 alone, 9 million seniors spent $3.4 billion out-of-pocket on the 10 drugs, a senior Biden administration official told reporters Tuesday during a call.

Rules of the game: Drugmakers have to sign agreements to join the negotiations by Oct. 1. CMS will then make an initial price offer to manufacturers in February 2024, and those companies have a month to accept or make a counteroffer. The negotiations will end in August 2024, with agreed-upon prices published on Sept. 1, 2024. The reduced prices won’t go into effect until January 2026. If a drugmaker declines to negotiate, it must either pay an excise tax of up to 95% of its medication’s U.S. sales or pull all of its products from the Medicare and Medicaid markets. The pharmaceutical industry contends that the penalty can be as high as 1,900% of a drug’s daily revenues. After the initial round of talks, CMS can negotiate prices for another 15 drugs for 2027 and an additional 15 in 2028. The number rises to 20 negotiated medications a year starting in 2029 and beyond.

The empires strike back: Merck, Johnson & Johnson, Bristol-Myers Squibb and Astellas Pharma are among the companies suing to halt the negotiation process. The industry’s biggest lobbying group, PhRMA, and the U.S. Chamber of Commerce have filed their own lawsuits. The suits make similar and overlapping claims that Medicare negotiations are unconstitutional. The companies argue that the talks would force drugmakers to sell their medicines at huge discounts, below market rates. They assert this violates the Fifth Amendment, which requires the government to pay reasonable compensation for private property taken for public use. The suits also argue that the process violates drugmakers’ free speech rights under the First Amendment, essentially forcing companies to agree that Medicare is negotiating a fair price. They also contend that the talks violate the Eighth Amendment by levying an excessive fine if drugmakers refuse to engage in the process.

Big pharma wants to take this to the Supreme Court: The suits are scattered in federal courts around the U.S. Legal experts say the pharmaceutical industry hopes to obtain conflicting rulings from federal appellate courts, which could fast-track the issue to the Supreme Court. Some drugmakers have confirmed their intention to bring their legal battle to the nation’s highest court. “As we look forward, we’re going to take this to the fullest, which means we’ll take it through District Court and, if need be, into Circuit Court and ultimately to the Supreme Court,” Merck CEO Robert Davis said during an earnings call earlier this month. “So, really that’s the strategy.”

[From CNBC]

“But your honor, this policy violates my client’s right to make a fortune off the sickness of seniors!” Which amendment is it again that protects businesses against any ethics or morals? The eleventy-first? None of the drug companies’ retaliation strategy is surprising, but the depth of their Scrooge McDuckiness is still always startling. And I’m very concerned about what will happen when these cases reach the hands of the current Supreme Court. I mean, can you imagine what Clarence Thomas’ response to Medicare will be? “Bitch, I haven’t paid out-of-pocket for anything in thirty years. Not my fault that you have!”

Embed from Getty Images

Embed from Getty Images

Embed from Getty Images