U.S. tweaks 2025 Medicare price negotiation process
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The Centers for Medicare & Medicaid Services (CMS) has added several changes to the Medicare price negotiation process expected to occur next year, leading to revised prices for up to 15 pharmaceutical products in 2027.
Issuing final guidance on the bargaining process, the CMS outlined late Wednesday the steps in the second cycle of negotiations set to begin after the selection of qualifying drugs by February 1, 2025.
“Today’s final guidance incorporates lessons learned from the first cycle of negotiations, as well as comments received on the draft guidance published in May,” the agency said.
As part of the changes, the drugmakers are expected to have additional time to provide their input in the bargaining process, as the CMS plans to meet them before informing its initial offers.
“What we plan to do is have meetings with manufacturers before CMS actually sends an initial offer. But then once we have done an initial offer, we will have a first optional negotiation meeting with the manufacturer earlier than we did this past year,” Reuters reported, quoting a CMS official.
“That will provide us with an opportunity to have a dialogue about the initial offer that CMS has sent and potentially some early thinking from the manufacturer themselves around how they might do a counteroffer.”
The CMS issued draft guidance on the negotiation process in May in line with President Biden’s Inflation Reduction Act which in 2022 allowed the agency to bargain for Medicare Part D drugs for the first time.
The first 10 Part D drugs selected for pricing negotiations were announced in August 2023, and the negotiated prices, which will take effect in 2026, were finalized in August.
Blockbuster drugs from Bristol Myers (NYSE:BMY), Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY), AbbVie (ABBV), Johnson & Johnson (JNJ), AstraZeneca (NASDAQ:AZN), Novartis (NVS), Merck (MRK), Amgen (AMGN), and Novo Nordisk (NVO) were part of the initial list.
A recent peer-reviewed study suggested that GSK (GSK), Astellas (OTCPK:ALPMF) (OTCPK:ALPMY) and Teva Pharmaceuticals (TEVA) will be new entrants to the next negotiation rounds.