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CMS Makes First Price Offers Under IRA Medicare Drug Price Negotiations Program

NEW YORK – The US Centers for Medicare & Medicaid Services (CMS) on Thursday announced that price negotiations have officially begun for the first 10 prescription drugs selected for price-setting in the Inflation Reduction Act's Medicare Drug Price Negotiation Program, a provision of the sweeping law meant to make the most exorbitantly priced prescription drugs more affordable.

CMS said it has sent initial offers to the drug companies that make these 10 drugs, though the prices themselves are confidential. The drugmakers will now have a chance to negotiate these prices through Aug. 1, 2024. Once a price is set, it will take effect beginning in 2026.

Although the first 10 drugs selected for negotiations are not themselves precision oncology agents — most are cardiology or diabetes drugs — several of the pharmaceutical companies that make these selected drugs are also among the biggest players in the precision oncology space. These include AstraZeneca, Bristol Myers Squibb, Janssen, Merck, and Novartis, among others.

These drugmakers have been staunchly and openly opposed to the price negotiations, and while they've begrudgingly agreed to participate, they've also been suing the government to block the law on a variety of legal grounds. Publicly, the drugmakers have argued that the law will stymie innovation and prevent new therapies, especially those for diseases with orphan designation, from making it to market.