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The federal government announced the next 15 medicines for which it will seek price reductions with the help of Medicare’s new negotiating power, including the breast cancer drugs Kisqali and Verzenio and the HIV treatment Biktarvy. Those cuts, which are allowed through the Inflation Reduction Act, will go into effect in 2028.
Also included in the third annual round of price negotiations were the rheumatoid arthritis medicines Orencia, Cimzia and Xeljanz, as well as Botox when it’s used for therapeutic purposes like migraines. The Centers for Medicare and Medicaid Services designated these drugs for price negotiations under IRA provisions meant to limit expenditures on the drugs associated with the program’s highest costs.
Combined, the 15 drugs account for $27 billion in Medicare spending and are used by some 1.8 million enrollees. Eli Lilly’s weekly GLP-1 shot for diabetes, Trulicity, is associated with $4.9 billion in annual costs, the highest of any medication on the list.
“CMS is taking strong action to target the most expensive drugs in Medicare, negotiate fair prices, and make sure the system works for patients — not special interests,” said CMS Administrator Mehmet Oz, in a statement. “This approach delivers real savings while strengthening accountability across the program.”
For the first time, these negotiations will include medicines covered by its Part B program that involves drugs administered in a physician’s office or other healthcare facility. Orencia, Cimzia and Botox are three examples.
However, two key drugs that had been previously been expected to make this year’s list — the widely used cancer immunotherapies Keytruda and Opdivo — were left off. The inclusion of both was delayed by at least a year through provisions of the One Big Beautiful Bill Act, which changed the way the IRA program is applied to certain drugs.
The price cuts will, as a result, be “immaterial” for most of the companies whose drugs are on the list, according to Leerink Partners analyst David Risinger. The one exception is Biktarvy, which has Medicare revenue that could represent 8% of Gilead Sciences’ 2027 sales, Risinger wrote in a note to clients.
The exposure for all of the other companies involved comes to 3% or less of overall revenue, Risinger wrote.
Nonetheless, the industry group Pharmaceutical Research and Manufacturers of America railed against the announcement. The group argued that the IRA is “undermining future medical progress” by discouraging investment in new drugs, particularly the chemical, or “small molecule,” drugs that are subject to IRA price negotiations sooner than biologic medications.
“CMS is now planning to set prices for additional small molecule cancer treatments that would otherwise be spared without this penalty – driving even more investment away from these critical treatment options,” said Elizabeth Carpenter, the group’s executive vice president of policy and research, in a statement.
The first round of price negotiations, conducted in 2024, took effect this year.
