Drug price negotiations: 5 key dates to watch

For the first time, Medicare will begin negotiating prescription drug prices this year. The plan will initially focus on 10 Medicare Part B and Part D drugs, setting a price cap — called the maximum fair price — to give beneficiaries some relief from high drug prices. Despite arguments that the new plan could hamper drug development or raise the cost of other medications, the price negotiation program was approved under the Inflation Reduction Act of 2022, which was signed into law in August.

Which drugs will make the list? Nobody knows just yet, but the Center for Medicare and Medicaid Services (CMS) said it will target drugs that cost Medicare the most, focusing on brand-name medications with no generic or biosimilar competition.

Some of the priciest drugs for Medicare in 2020 were the blood thinners Eliquis and Xarelto; oncology drugs such as Revlimid, Imbruvica and Ibrance; the diabetes drugs Januvia, Trulicity, and Jardiance; Humira, an autoimmune drug, and the asthma drug, Symbicort, according to the AARP. And all of these drugs saw price increases in 2022.

Despite their price points, some of these drugs — such as Eliquis and Revlimid — might avoid becoming targets because generic versions of the medications are on the market. The first biosimilar for Humira is also set to launch this year, with more to follow. And a generic for Symbicort called Breyna was approved last year and despite a last-ditch patent dispute, has been cleared to enter the market.

After this initial batch of 10 drugs is chosen, the CMS will add 15 more each year for 2027 and 2028, and another 20 in 2029 and beyond.

What can pharma companies expect as the CMS gets ready to roll out this new program?

Laying out the process

Because this is the first time the CMS has negotiated drug prices there is no established process for choosing drugs or negotiating with companies to set the maximum fair price. So, beginning this winter and into the spring, the CMS will hammer out how it will collect data on drugs to determine which medications should make the list and how it will negotiate with the companies that produce the drugs that are ultimately selected. The agency plans to provide opportunities for public comment, and this summer, will update its guidance on this process and provide another opportunity for public input.

In the meantime, here are five important dates pharma companies should keep on their radar to monitor the process over the next few years:

Now through May 31, 2023: This is when the CMS will comb through Medicare Part D drug expenditures and make a list of drugs that meet the criteria for negotiation.

Sept. 1, 2023: The CMS will announce its list of 10 drugs targeted for negotiation in 2026.

Oct. 1, 2023: Companies with drugs selected for negotiation must submit signed agreements to participate in the negotiation program. The following day those same companies must submit manufacturer-specific data to help the CMS determine the maximum fair price for the drug.

Feb. 1, 2024: The CMS will inform companies about the maximum fair price selected for the drug along with details about how officials arrived at that price. From this point until Aug. 1, 2024, companies can either accept the price set by the CMS or submit a counteroffer and negotiate changes.

Sept. 1, 2024: The CMS will announce the final maximum fair price for drugs on the 2026 list. These prices will go into effect Jan. 1, 2026.