FOCUS-Hiring and data: how the U.S. will arrange latest Medicare drug price talks

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By Ahmed Aboulenein

WASHINGTON, Aug 22 (Reuters)The U.S. government will soon begin hiring experts and collecting the information needed to launch direct negotiations over prescription drug prices for older and disabled people, a top Biden administration official told Reuters.

President Joe Biden last week signed into law the Inflation Reduction Act, introducing latest policies to tackle climate change, taxes and the rising cost of medicines.

The Act will for the primary time allow the federal Medicare health plan for people age 65 or older and the disabled to barter prices on as much as 20 drugs a 12 months. It also sets limits on drug price increases for Medicare and caps out-of-pocket costs for those enrolled in this system.

The move represents a rare legislative defeat for the powerful pharmaceutical industry and sets a precedent for curbing drug prices on the earth’s most lucrative marketplace for medicines.

“We definitely wish to increase our expertise,” Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, said in an interview. “This has been a protracted time coming, for the federal government and Medicare to have this authority.”

Brooks-LaSure said she plans to create a latest team tasked with negotiating drug prices throughout the Center for Medicare. CMS says it expects to start out hiring for over 100 positions starting this fall.

“We’re really on the lookout for clinical expertise … in addition to individuals who have experience negotiating,” said Brooks-LaSure, whose agency has regulatory oversight of nearly all healthcare providers in america and control of federal health programs covering 170 million people, including 64 million enrolled in Medicare.

“Certainly one of the primary things is for us to decide on which drugs to barter. We have now 10, and that’s something that we’ll be announcing next fall, so around a 12 months from now,” she said.

CMS might want to collect data from pharmaceutical manufacturers, health insurers and pharmacy profit managers (PBMs) to discover those first 10 drugs that might be subject to negotiations, an inventory that can rise to twenty by 2029, she said.

DATA COLLECTION

The federal government will pick from 50 “high spend” drugs based on Medicare utilization and price which have just one supplier. Healthcare analysts have said that list could include Bristol-Myers Squibb Co’s BMY.N top-selling cancer drug Revlimid, AbbVie Inc’s ABBV.N rheumatoid arthritis drug Humira, and blood thinner pill Xarelto which is sold by Johnson & Johnson JNJ.N in america.

But full drug price information is usually obscured within the U.S. market. Drugmakers, who fought tooth and nail to stop the brand new law from passing, say they often provide substantial rebates and discounts to health plans that usually are not passed on to consumers. Health plans argue that drugmakers are accountable for setting, and raising, the worth of their medicines.

The pharmaceutical industry’s powerful trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), declined to comment on how its members might contribute information to CMS or if any of them had been approached.

Officials representing the most important three PBMs – who help negotiate drug prices for health plans – didn’t reply to requests for comment.

AHIP, the medical insurance industry’s largest trade group, and its members “stand able to assist” the federal government “on this or other implementation issues for brand new policies,” spokesperson David Allen said.

MOVING FAST

Health policy experts say CMS needs to rent from the surface since it doesn’t currently have the capability to barter drug prices. To have an effect, the agency might want to move quickly, since the law requires it to start out negotiating in 2023, with the brand new prices taking effect in 2026.

“The concept of negotiating drug prices has been talked about for quite some time, but this laws got here together very fast. So the federal government goes to should move quickly to place in place an infrastructure here,” said Larry Levitt, executive vice chairman for health policy on the Kaiser Family Foundation.

Brooks-LaSure said she would forged a large net and is seeking to hire experienced public and private-sector negotiators in addition to drug-pricing experts.

“We’re absolutely seeking to hire from inside our friends within the administration as well people outside, and folk will begin to see postings on our CMS website,” she said. “So whether it is the VA, whether it’s from the surface world, from the business market, welcome.”

While the Department of Veteran Affairs (VA), which covers healthcare for greater than 9 million people, negotiates drug prices, it does so on a much smaller scale than Medicare can be expected to.

Brooks-LaSure acknowledged the difference and said, “there might be some latest uniquely CMS approaches” to negotiations.

CMS must also look to groups just like the Institute for Clinical and Economic Review (ICER), an influential Boston-based nonprofit that researches drug prices, said Andy Slavitt, a former CMS chief under President Barack Obama.

“These are difficult negotiations where persons are forced to eat the pet food they don’t need to eat,” Slavitt said.

COLUMN-Landmark U.S. healthcare bill sets stage for lower Medicare prescription drug costs

(Reporting by Ahmed Aboulenein in Washington Editing by Michele Gershberg and Matthew Lewis)

((ahmed.aboulenein@tr.com; +1 202-519-3051;))

The views and opinions expressed herein are the views and opinions of the writer and don’t necessarily reflect those of Nasdaq, Inc.

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