**Medicare Drug Price Negotiations: What We Know So Far**
**Background and Overview**
In December 2023, President Joe Biden announced the Inflation Reduction Act, granting Medicare the power to directly negotiate drug prices with manufacturers for the first time in the program’s history. The aim of this policy is to make expensive medications more affordable for older Americans. However, the final prices resulting from these negotiations have not yet been disclosed. Medicare is expected to reveal the new negotiated prices for 10 drugs in September, with these prices taking effect in 2026.
**Drugmakers’ Response**
Despite concerns about the long-term impact of Medicare drug price negotiations on drug innovation and profits, pharmaceutical companies seem less worried about the immediate effects. Executives from Bristol Myers Squibb, Johnson & Johnson, AbbVie, and Novartis have expressed confidence in their ability to navigate the impact of the negotiations on their respective treatments.
Bristol Myers Squibb CEO Christopher Boerner revealed that the company had received the government’s final price for its blood thinner Eliquis, shared with Pfizer. He stated that the company is increasingly confident in its ability to handle the impact and will provide more details once Medicare discloses the final prices.
AbbVie CEO Robert Michael acknowledged the expected sales hit to their top-selling leukemia drug, Imbruvica, but still expressed confidence in delivering on their long-term outlook.
J&J Worldwide Chairman Jennifer Taubert also remains optimistic about the company’s long-term growth outlook after seeing the negotiated prices for their blood thinner Xarelto and psoriasis treatment Stelara.
Novartis CEO Vasant Narasimhan acknowledged that the short-term impact of Medicare drug price negotiations might be manageable for their first set of drugs. However, he emphasized that the policy is ultimately detrimental to innovation and American patients.
**Opposition to Medicare Drug Price Negotiations**
Executives from each of the drugmakers have voiced their opposition to Medicare drug price negotiations during their earnings calls. Boerner from Bristol Myers Squibb stated that arbitrary price setting by the government on life-saving medicines is not good public policy, and they remain concerned about the long-term implications of the Inflation Reduction Act on innovation.
**Legal Challenges and Pending Decisions**
Merck and Novartis have filed lawsuits against the negotiations, joining other pharmaceutical companies and trade groups that have had their claims rejected in recent months. The outcome of these cases is still pending, but they raise concerns about the future of Medicare drug price negotiations.
**Northwell Health’s Venture into Entertainment**
Northwell Health, the largest health system in New York, has launched a TV and film production studio called Northwell Studios. While the goal is not to generate profits, the studio aims to raise awareness about Northwell and differentiate itself in a competitive market. The health system has previously participated in entertainment projects such as the Netflix docu-drama series “Lenox Hill” and documentaries focused on Covid-19 and mental health. With Northwell Studios, they plan to undertake more projects regularly, focusing on unscripted content while exploring opportunities for scripted content. Patient and employee consent is a priority, and the health system aims to capture content in a way that minimally disrupts operations and patient flows.
Overall, the first round of Medicare drug price negotiations has concluded, but the final prices are yet to be disclosed. While drugmakers express some confidence in navigating the impact, they remain opposed to the policy and its potential long-term effects on innovation. Legal challenges against the negotiations are still pending, adding uncertainty to the future of Medicare drug price negotiations. Meanwhile, Northwell Health’s venture into entertainment through Northwell Studios aims to raise awareness and create impactful content while prioritizing patient and employee consent and minimizing disruptions to healthcare operations.
