Medicare Drug Worth Negotiation results in 38% to 79% value lower – Healthcare Economist

Medicare drug value negotiation is right here. The utmost truthful costs (MFP) set by Medicare result in reductions between 38% and 79%. Actually, the actual reductions are bigger for the reason that figures listed within the desk beneath are reductions off of 2023 costs (quite than 2024 costs).

How did the negotiation course of work? CMS’s fact sheet described the method as follows:

CMS held three conferences with every collaborating drug firm to debate the provides and counteroffers, focus on proof, and try to arrive at a mutually acceptable value for the drug. Throughout the course of the negotiation course of, CMS revised its provides for every of the medicine upward in response to those discussions. Likewise, many drug firms revised their counteroffers for his or her medicine downward, primarily based on the discussions with CMS. For 5 of the chosen medicine, this means of exchanging revised provides and counteroffers resulted in CMS and the drug firm reaching an settlement on a negotiated value for the drug in affiliation with a negotiation assembly. In 4 of those circumstances, CMS accepted a revised counteroffer proposed by the drug firm. For the remaining 5 chosen medicine, CMS despatched a written ultimate provide to these drug firms, in line with the method described in its steerage, and in every occasion, the drug firm accepted CMS’s provide on or earlier than the statutory deadline.

However how precisely did CMS arrive at these costs? This isn’t clear. Actually, CMS mentioned IT received’t make public a proof of the agreed-upon negotiated costs till March 2025.

Extra particulars on the MFP negotiation timeline is beneath.

What Information and sources have been utilized in setting the MFP? Related Information included:

…producer=submitted knowledge on analysis and growth prices, prior federal monetary assist, unit prices of manufacturing and distribution, market/income/gross sales knowledge, and Information on patents, FDA exclusivities, and FDA functions and approvals. For the elements listed at part 1194(e)(2) associated to proof about different therapies (together with therapeutic advances, prescribing Information, comparative effectiveness, and unmet medical want), CMS thought of Information from all kinds of sources, together with: Information submitted by collaborating drug firms, individuals with Medicare, tutorial consultants, clinicians, caregivers, and different events…; Information offered on the Affected person-Targeted Listening Periods…; Information shared by collaborating drug firms throughout conferences with CMS; and Information CMS recognized from its personal literature searches, together with from medical pointers and revealed research.

The negotiated costs will probably be efficient January 1, 2026.