List of Drugs Affected by Medicare Negotiation in Inflation Reduction Act

  • Democrats are close to passing the Inflation Reduction Act, a sprawling bill that tackles drug pricing.
  • The bill would allow Medicare to negotiate prices on certain drugs.
  • SVB Securities identified 14 blockbuster drugs at high risk of being affected.

As Senate Democrats are close to passing a sprawling $739 billion bill that includes several actions on drug pricing, the pharma industry is sounding alarms that it will threaten future investments in research and development and hurt the industry.

The industry is particularly opposed to a key idea in the bill that would allow Medicare, the US health program for seniors and some disabled people, to negotiate prices on a handful of best-selling medicines. The limited scope of the negotiations will affect some drugmakers, like AbbVie, AstraZeneca, and Novo Nordisk, more than others, according to an August 2 analysis from SVB Securities analyst David Risinger.

The bill would allow the Health and Human Services secretary to select 10 drugs to negotiate lower prices on in 2023. Those negotiated prices would go into effect in 2026. In 2024, the HHS chief can choose to negotiate prices on 15 more drugs, which would go into effect in 2027. Ultimately, the bill would allow Medicare to negotiate prices on 60 drugs by 2029.

The price negotiations are estimated to save the US $101 billion over 10 years, and help fund other aspects of the bill, called the Inflation Reduction Act. The bill also sets limits on how much drug companies can raise the prices of their medicines and caps out-of-pocket drug costs for individuals in the Medicare program.

SVB’s Risinger called the bill a “seminal moment,” arguing it would have a long-term negative impact on the industry. The idea of ​​Medicare negotiating prices has been debated for nearly three decades in the US government, going back to 1993. This bill looks like the best chance of that becoming reality, as industry consultants told Jefferies’ Michael Yee the bill has a 90% to 95% chance of passing, according to an August 2 research note.

Risinger identified 14 key drugs that have the most to lose from this bill. These drugs are set to rake in billions in sales in coming years, but could be eligible for Medicare-negotiated prices years before they are expected to face cheaper generic competition.

In an interview with Insider, Risinger cautioned that this is an initial analysis that isn’t comprehensive.

For instance, GSK’s shingles vaccine Shingrix could be included if vaccines are eligible for negotiations under the bill, he added. The drug industry and analysts are still figuring out what the impacts and consequences of the bill may be, as the legislation has moved forward quickly. Risinger’s list provides a snapshot of which blockbuster drugs are likely to be affected.

Here are the 14 drugs at high risk:

  • AbbVie’s blood-cancer pill Imbruvica, which was approved in the US in 2013 and brought in $5.41 billion in sales last year. Risinger suggests it could face a negotiated price in 2026, six years before its patents expire.
  • AstraZeneca’s blood-cancer treatment Calquence could be open for a negotiated price in 2026, six years before its expected loss-of-exclusivity date in the US.
  • Novo Nordisk’s Type 2 diabetes drug Ozempic is the Danish drugmaker’s best-selling medicine, racking up about $4.6 billion in 2021 sales. Risinger says it could also face a negotiated price in 2026, a year where he forecasts Ozempic would grow to $6.83 billion in US sales.
  • Gilead’s HIV pill Biktarvy won US approval in 2018 and could face a negotiated price in 2027, according to Risinger. He forecasts more than $10 billion in US sales by 2030.
  • AbbVie’s arthritis and atopic dermatitis pill Revoq will play a key role in the North Chicago, Illinois-based drug giant’s future, with the company forecasting $7.5 billion in sales in 2025. First approved in 2019, Risinger expects it could be eligible for a negotiated price in 2028, five years before the key patents are set to expire.
  • AbbVie’s leukemia treatment Venclexta could be hit in 2026. The drug was first approved in 2016 and registered $1.82 billion in 2021 sales.
  • Johnson & Johnson’s antipsychotic Invega franchise may also be impacted in 2026. Risinger’s report included $3.31 billion in 2026 forecasted US sales for the Invega franchise, which is patent protected until 2031.
  • Eli Lilly’s Mounjaro is the only drug on the list approved in 2022. The Type 2 diabetes drug has drawn excitement for its potential as an obesity treatment, after showing “substantial and sustained reductions in body weight” in a late-stage study. Risinger says Mounjaro could be subject to price negotiations in 2031, five years before its patents expire.
  • Eli Lilly’s breast-cancer drug Version won approval in 2017 and could be hit by a negotiated price in 2026. Risinger says that’s five years before its patents expire.
  • AstraZeneca’s Ultomiris is the only rare-disease treatment on the list, designated to treat paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome. Risinger estimates it could see a negotiated price in 2031, four years before key patents expire in 2035.
  • The schizophrenia and bipolar disorder therapy Vraylar is the third AbbVie drug on Risinger’s list. The pill won US approval in 2015, and Risinger estimates it would be eligible for negotiations in 2026.
  • Amgen’s Enbrel stands apart as the oldest drug on the list, first winning US approval in 1998. The injection treats several inflammatory diseases like arthritis and psoriasis. Enbrel brought in $4.47 billion in sales last year. Risinger estimates it could face a negotiated price in 2026, three years before its patents expire.
  • Johnson & Johnson’s Darzalex Faspro was approved in 2020 to treat multiple myeloma. By being given as an injection under the skin, it’s a more convenient version of Darzalex, which required a lengthy IV infusion. Risinger’s analysis says it could face a negotiated price in 2033, three years before expected generic competition.

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