The first 10 drugs selected for price negotiation under the Inflation Reduction Act (IRA) have been officially named by the Centers for Medicare and Medicaid Services (CMS). While some of the choices were expected, a few came as a surprise.
The IRA set specific criteria for Medicare-covered drugs eligible for negotiation. The drugs had to be FDA approved for at least seven years or biologics approved for at least 11 years. Additionally, they had to be high expenditure, single-source drugs without generic or biosimilar competition.
Predictions made as far back as September 2022 were fairly accurate in determining the selection of drugs based on these rules. However, a couple of the drugs announced on Tuesday were not anticipated by the projections. One of these drugs is Entresto, a heart failure medication manufactured by Novartis.
Although Entresto did not show up in initial projections, its use has significantly increased in recent years. According to Novartis, approximately 587,000 Medicare beneficiaries take Entresto annually. The company attributes the expansion of its use to ongoing improvements made through clinical trials.
Another drug chosen for negotiation is the autoimmune disease biologic Stelara. While it was not predicted initially, Stelara meets the selection criteria and accounts for over $2.6 billion in Medicare Part D spending.
Drugs with competition from generics or biosimilars are not eligible for negotiation. However, an agreement reached earlier this year may change Stelara’s eligibility in the future. Johnson & Johnson, the manufacturer of Stelara, settled with Amgen to allow the sale of a biosimilar version in 2025.
Two other products made by Johnson & Johnson, Xarelto and Imbruvica, were also selected for negotiation. The discounted prices resulting from the program will take effect in 2026.
Regarding the future revising of the selected drugs, a senior administration official confirmed that Stelara was chosen according to the IRA guidelines but acknowledged that the availability of generic competition could impact the negotiation process in the future.
A spokesperson for Johnson & Johnson expressed concerns about the impact of the IRA’s price control provisions on medical innovation, patient access, choice, and overall quality of care. They did not provide further comment on Stelara’s selection and the expected future biosimilar competition.
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