Medicare Drug Value Negotiation results in 38% to 79% worth lower – Healthcare Economist

Medicare drug worth negotiation is right here. The utmost truthful costs (MFP) set by Medicare result in reductions between 38% and 79%. In reality, the actual reductions are bigger because the figures listed within the desk under are reductions off of 2023 costs (reasonably than 2024 costs).

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

CMS held three conferences with every taking part drug firm to debate the presents and counteroffers, talk about proof, and try and arrive at a mutually acceptable worth for the drug. Throughout the course of the negotiation course of, CMS revised its presents for every of the medicine upward in response to those discussions. Likewise, many drug corporations revised their counteroffers for his or her medicine downward, primarily based on the discussions with CMS. For 5 of the chosen medicine, this strategy of exchanging revised presents and counteroffers resulted in CMS and the drug firm reaching an settlement on a negotiated worth for the drug in affiliation with a negotiation assembly. In 4 of those instances, CMS accepted a revised counteroffer proposed by the drug firm. For the remaining 5 chosen medicine, CMS despatched a written closing supply to these drug corporations, in step with the method described in its steerage, and in every occasion, the drug firm accepted CMS’s supply on or earlier than the statutory deadline.

However how precisely did CMS arrive at these costs? This isn’t clear. In reality, CMS stated it gained’t make public a proof of the agreed-upon negotiated costs till March 2025.

Extra particulars on the MFP negotiation timeline is under.

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

…producer=submitted knowledge on analysis and improvement prices, prior federal monetary assist, unit prices of manufacturing and distribution, market/income/gross sales knowledge, and data on patents, FDA exclusivities, and FDA purposes and approvals. For the elements listed at part 1194(e)(2) associated to proof about various therapies (together with therapeutic advances, prescribing data, comparative effectiveness, and unmet medical want), CMS thought-about data from all kinds of sources, together with: data submitted by taking part drug corporations, folks with Medicare, educational consultants, clinicians, caregivers, and different events…; data offered on the Affected person-Centered Listening Classes…; data shared by taking part drug corporations throughout conferences with CMS; and data CMS recognized from its personal literature searches, together with from scientific pointers and printed research.

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