NEW YORK – The US Centers for Medicare & Medicaid Services (CMS) on Friday announced that it has selected an additional 15 drugs for discussions under the Inflation Reduction Act's Medicare Drug Price Negotiation Program that is intended to lower the government payor's spending on prescription drugs.
Among the 15 drugs selected was Pfizer's CDK4/6 inhibitor Ibrance (palbociclib), which is approved to treat hormone receptor-positive, HER2-negative breast cancer.
During the third quarter of 2024, Pfizer brought in $1.09 billion in revenue from sales of Ibrance, which has a list price of $15,982.39 for a 21-day supply.
Although Pfizer is not one of the drugmakers that has sued the US Department of Health and Human Services to try to block negotiations, the firm has been critical of the IRA and the impact that these negotiated prices could have on innovation. Pfizer has argued publicly that the program will stymie small molecule drug R&D, for instance. Many precision medicines are small molecule drugs.
CMS said that it will begin negotiations with the drugmakers that make the medications on its list during 2025 and that the negotiated prices will go into effect in 2027. As was the case for the first round of drugs selected, companies are not required to participate in negotiations. However, the alternative is pulling the selected drugs off the Medicare market altogether, which many drugmakers claim makes the negotiations compulsory. For this round, the companies will have until Feb. 28, 2025, to decide if they wish to negotiate.
Together, the 15 new drugs selected cost Medicare around $41 billion from November 2023 to October 2024, amounting to about 14 percent of Medicare Part D spending during that time. The combined cost of these 15 drugs and the 10 drugs selected in the first round made up more than one-third of the prescription drug spending over this time.
In a statement on Friday, CMS touted the success of the first round of negotiations, stating that it was able to negotiate lower prices for all 10 drugs. Those prices will go into effect beginning Jan. 1, 2026. According to calculations from CMS, if the new prices had been in effect in 2023, they would have saved a combined $6 billion in costs, or 22 percent of Medicare's prescription drug spending.
As outlined in the IRA, CMS will select an additional 15 drugs for the third cycle of negotiations, which will include drugs covered under both Part B and Part D. After that, each cycle of negotiations will include 20 drugs.