Medicare to Negotiate Prices on 15 More Drugs, Including Cancer and HIV Treatments
Medicare is expanding its efforts to lower prescription drug costs, announcing a new list of 15 medications subject to price negotiations under the Inflation Reduction Act. The move, unveiled by the Centers for Medicare and Medicaid Services (CMS), targets some of the program’s most expensive drugs, impacting nearly 1.8 million beneficiaries.
The latest round of negotiations, slated to take effect in 2028, includes widely used treatments for breast cancer (Kisqali and Verzenio), HIV (Biktarvy), rheumatoid arthritis (Orencia, Cimzia, and Xeljanz), and migraines (via Botox). This marks the first time drugs administered in a physician’s office or other healthcare facility – covered under Medicare Part B – will be included in the negotiations.
Combined, these 15 drugs represent $27 billion in annual Medicare spending. Trulicity, a weekly GLP-1 shot from Eli Lilly used to treat diabetes, accounts for the largest share of that cost at $4.9 billion annually. “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,” a CMS administrator stated. “This approach delivers real savings while strengthening accountability across the program.”
However, the list notably excludes two prominent cancer immunotherapies, Keytruda and Opdivo, which had been widely anticipated for inclusion. Their addition was delayed by at least a year due to provisions within the One Big Beautiful Bill Act, altering the application of the IRA program to certain medications.
Analysts predict the financial impact of these price cuts will be limited for most pharmaceutical companies. According to one analyst, the cuts will be “immaterial” for all but Gilead Sciences, as revenue from Biktarvy could represent up to 8% of its projected 2027 sales. The exposure for other companies involved is estimated at 3% or less of overall revenue.
Despite the limited financial impact for most, the pharmaceutical industry swiftly condemned the announcement. The industry group Pharmaceutical Research and Manufacturers of America (PhRMA) argued that the IRA “is undermining future medical progress” by discouraging investment in the development of new drugs, particularly “small molecule” drugs. “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, PhRMA’s executive vice president of policy and research.
This latest action builds on the first round of price negotiations, which took effect earlier in 2024, signaling a continued commitment from the Biden administration to lower healthcare costs for seniors. The ongoing implementation of the Inflation Reduction Act promises to reshape the pharmaceutical landscape and redefine the balance of power between drug manufacturers and the nation’s largest healthcare program.
