(New York) Major pharmaceutical companies have reluctantly agreed to lower the selling prices of ten drugs treating serious illnesses for the insurance plan for seniors in the United States, but are not giving up against the Biden law that forced them to do so.
This “historic” reduction, which is due to come into effect on 1er January 2026, was announced Thursday morning by President Joe Biden and Vice President and Democratic White House candidate Kamala Harris, who were delighted with this “historic milestone.”
But, on the industrial side, the air was not at the party. They had resolved in October 2023 to participate in these unprecedented negotiations, because refusing would expose them to “unbearable” consequences, including tax sanctions.
The Swedish-British group AstraZeneca and the American group Johnson & Johnson explained on Thursday that they had also given in to ensure that their drugs remained available to Medicare beneficiaries, covering those over 65 in the United States.
“AstraZeneca believes that everyone who needs our treatments should be able to access them, which was at risk for Medicare and Medicaid patients. [assurance maladie des plus défavorisés, NDLR] if a manufacturer refused to “come to an agreement with the authorities,” the group commented.
“For this reason, AstraZeneca has accepted the MFP for Farxiga,” a diabetes treatment, he added.
The “Maximum Fair Price” mechanism stems from a flagship law of Joe Biden’s mandate, the “Inflation Reduction Act” (IRA), a vast energy transition and purchasing power program.
Ten drugs have been selected for these negotiations, which began in February and are due to be completed before 1er September, which were prescribed in 2022 to some 9 million Medicare beneficiaries.
These include Entresto from the Swiss company Novartis (heart problems), Stelara (psoriasis, Crohn’s disease) from the Belgian company Janssen, a subsidiary of Johnson & Johnson, and Eliquis (anticoagulant) from the Americans Bristol-Myers Squibb (BMS) and Pfizer.
-38% to -79%
The latter two stressed, in an identical press release, that Eliquis was the most prescribed on the list (nearly 4 million beneficiaries), but not the most expensive, and that lowering the price for Medicare “does not determine the price that patients will pay.”
An argument also made by Novartis, claiming that before the MFP, 98% of Medicare beneficiaries taking Entresto paid an average of $29 per month out of pocket.
“Price controls do not mean that patients will have better access or pay less at the pharmacy,” the group stressed.
According to information released Thursday, Medicare will pay $295 for a month of Entresto instead of the current $628, a 56 percent reduction.
The biggest drop (-79%) concerns Januvia (diabetes) from the American group Merck, and the smallest Imbruvica (blood cancers, -38%) from the American biotech Pharmacyclics.
Merck “disagrees” with the claim that the new monthly price of Januvia – which is dropping from $527 to $113 – “is a fair price reflecting [sa] value,” he said, saying he “fears […] a major chilling effect on future innovation and investment in research.”
The agreement will save $1.5 billion for affected policyholders and $6 billion for taxpayers in the first year, according to the White House.
As for the loss of earnings for the laboratories, Sel Hardy, CFRA analyst, recalled on Thursday that BMS executives “seemed optimistic” at the end of July about the group’s ability to withstand the shock. She described the final price as “reassuring”.
Drug prices, which are not regulated at the national level in the United States, are often much higher than in other developed countries. It is common for insured people to pay a portion, sometimes a significant portion, out of pocket.
“For years, millions of Americans have had to choose between buying their medicine or buying food,” Biden said.
But for Johnson & Johnson – which has two drugs on the list – the price cap will increase costs for other Americans and restrict access to the drugs.
According to a spokesperson, the group considers the IRA to be an “arbitrary law lacking a scientific approach to assessing clinical evidence.”
This reform “discourages innovation and limits our ability to discover and develop new, breakthrough medicines for those who need them,” Novartis lamented, calling the IRA an “unconstitutional” law.
Several groups have taken legal action since 2023, such as the Danish laboratory Novo Nordisk and Merck, which denounced “extortion”.
Medicare should be able to negotiate prices for up to 60 drugs over the next four years, and then up to 20 more each year.