Source: AFP
Major drug companies hit back after a major deal revealed on Thursday to lower the cost of 10 essential drugs, with some saying the price-setting process was not transparent.
Their remarks came after US President Joe Biden and Vice President Kamala Harris announced an agreement to lower the cost of the first 10 drugs selected for Medicare price talks.
The deal with the drugmakers — who said they entered the negotiations because they had no other choice — is set to save seniors in the United States $1.5 billion in out-of-pocket costs.
It is the result of months of negotiations and is expected to save Medicare $6 billion in the first year alone, Biden said, referring to federal health insurance for seniors.
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While the announcement is a potential boon for Democratic presidential nominee Harris as she works on her economic messaging ahead of the November election, drug companies have long resisted the cuts.
The US government is initially limited to selecting 10 drugs for price talks and may expand the program in future years.
“Non-objective”
The deals come on the back of the Inflation Reduction Act (IRA), a major package of energy transition policy and social reforms.
This allowed Medicare to begin negotiating drug costs for the first time in its nearly 60 years of existence.
Novartis, whose heart failure treatment Entresto is among the 10 drugs selected, dismissed the price-setting process as “not objective or transparent”.
“Novartis believes that the price-fixing provisions in the IRA are unconstitutional and will have long-lasting and devastating consequences,” the company added in a statement.
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It said it agreed to a “maximum fair price” only to “avoid other untenable options, including catastrophic fines or the removal of all of our products from both Medicare and Medicaid.”
For the 10 selected drugs, discounts from 2023 prices range from 38% to 79%. The new cost will come into effect in 2026.
In addition to Entresto, the drugs include AstraZeneca’s Farxiga used against diabetes, as well as the anticoagulant Eliquis — used by millions of Medicare beneficiaries.
AstraZeneca said in a separate statement that it accepted the honor as “leaving is not an option”.
If a manufacturer refuses to accept the price, access for Medicare and Medicaid patients could be jeopardized, he said.
Patient cost?
The companies also warned that patients could face higher costs and argued that the deal undervalued their products.
Bristol Myers Squibb (BMS), which is behind Eliquis, warned that “insurance plans and pharmacy benefit managers are ultimately responsible for what patients will pay.”
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“The IRA does not protect patients from potential increases in their cost-sharing or restrictions on their access” to Eliquis once the fair price maximum takes effect in 2026, the company added.
CFRA analyst Sel Hardy, however, noted that BMS management seemed confident it could absorb the IRA’s impact on Eliquis.
A Johnson & Johnson spokesman called the law arbitrary and unscientific.
This “underestimates the benefit our medicines provide to millions of patients,” J&J said.
“Historical Landmark”
U.S. residents face the world’s highest prescription drug prices, leaving many people paying partially out-of-pocket despite already exorbitant premiums.
The new agreement was reached after Democrats pushed for the administration to be able to negotiate prices directly with drugmakers for federal health programs.
The White House said the agreement on lower prices is a “historic milestone.”
“The vice president and I are not backing down,” Biden said in a statement Thursday.
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His comments came before a first joint public event with Harris since she replaced him as the Democratic nominee in the upcoming election.
“We will continue the fight to make sure all Americans can pay less for prescription drugs and give American families more breathing room,” he said.
The rising cost of living is a key issue for the 2024 election.
Last October, the pharmacists behind select drugs for serious illnesses reluctantly agreed to negotiate a price cut.
Source: AFP
