The cancer drugs Revlimid, Keytruda and Opdivo, along with diabetes treatments Januvia and insulin would likely be among the medicines subject to Medicare price negotiation if a leading House proposal were to become law.
Blood thinners Eliquis and Xarelto and the eye drug Eylea would also probably be targets under the proposal, which designates for price negotiation at least 25 and up to 250 drugs for which Medicare spends the most money. The top 25 drugs in 2017 cost Medicare $48.2 billion before rebates were added in, or roughly 27% of all of the program's drug spending.
The proposal would expose Bristol-Myers Squibb to potential revenue cuts, as it markets Eliquis and Opdivo. The company is also about to take ownership of Revlimid, provided its acquisition of Celgene is completed.
The proposal was released yesterday by House Speaker Nancy Pelosi, D-Calif., and is expected to face a hearing next week in a House subcommittee. Inclusion of Medicare price negotiation, which Pelosi said would be extended to the private sector, differs from a proposal voted to the Senate floor in July.
Senate Majority Leader Mitch McConnell, R-Ky., said the chamber will not consider any bill that contains direct Medicare price negotiation, although President Trump said it was "great to see" the Pelosi plan.
In 2017, Revlimid was the biggest ticket drug item in Medicare, costing the program $3.3 billion before rebates. As an oral drug for multiple myeloma, it is covered by Part D, which is for drugs patients can take themselves. Eylea was the biggest drug administered by physicians, and covered by Part B of the program.
Top 10 drugs for Medicare spending
|Eliquis||Bristol-Myers Squibb/Pfizer||$3.1 billion|
|Januvia||Merck & Co||$2.8 billion|
|Xarelto||Johnson & Johnson/Bayer||$2.6 billion|
|Harvoni||Gilead Sciences||$2.6 billion|
|Humira Pen||AbbVie||$2 billion|
|Spiriva||Boehringer Ingelheim||$1.7 billion|
|Novolog Flexpen||Novo Nordisk||$1.5 billion|
The above analysis is taken from the Medicare spending dashboard for Part B and Part D, which does not include manufacturer rebates, so actual spending is likely less than this. However, because of the high list prices or utilization of these drugs, it is likely that the post-rebate top 10 looks very similar to this one.
Drugs like Sanofi's long-acting insulin Lantus, GlaxoSmithKline's asthma drug Advair and Pfizer's epilepsy drug Lyrica ranked in the top 10 in 2017, but because they now face generic competition, they are excluded from this list because they wouldn't be subject to price negotiation under the House proposal.
Spending for hepatitis C drug Harvoni has also likely shrunk as patients are cured and more competitor drugs entered the market and drove prices down.
Even if the House price negotiation proposal is defeated, the risk for these top-selling Medicare drugs would not be entirely eliminated. Some of the areas of agreement between the House and Senate include mandated rebates for drugs that have price increases of greater than inflation. Six of the 10 drugs on the above list had double-digit price increases between 2013 and 2017, and only Harvoni and Eylea saw price decreases.
Meanwhile, the concept of tying U.S. prices to those paid overseas is one that is shared by the House plan and Trump administration. The Trump administration plan is restricted to Part B drugs only, using a competitive bidding mechanism, while the House Democratic plan sets the maximum price for negotiable drugs at 1.2 times the average paid in six other countries.