And We're Off: The Next 15 Drugs Up for Medicare 'Negotiations' Have Been Announced

Well, this is a fitting end to a wild week. We now have the 15 medicines that will go through the next round of price-setting “negotiations” with CMS. Here are the lucky “winners”: 

• Ozempic/Rybelsus/Wegovy (Novo Nordisk)

• Trelegy Ellipta (GSK)

• Xtandi (Astellas Pharma)

• Ofev (Boehringer Ingelheim)

• Pomalyst (Bristol-Myers Squibb)

• Ibrance (Pfizer)

• Linzess (AbbVie)

• Calquence (AstraZeneca)

• Xifaxan (Bausch)

• Breo Ellipta (GSK)

• Tradjenta (Boehringer Ingelheim)

• Janumet (Merck)

• Austedo (Teva)

• Vraylar (AbbVie)

• Otezla (Amgen)

The CMS fact sheet is here. I don’t think there’s any can’t-miss coverage yet, but here are links to STAT, WSJ, WaPo, and NYT.

Here’s PhRMA’s statement. And this is what BIO pushed out.   

There is plenty of other news to go through, but that will have to wait until next week. I’d rather concentrate on the big news.

Here are ten takeaways from the next 15 drugs: 

1. All of the headlines are going to be about Ozempic, based on name recognition alone. We’re going to hear a lot about that specific “negotiation” between now and Nov. 30, but that conversation is only going to take one of four tracks, which we discussed earlier in the week. 

2. More interesting to me? Four cancer meds made the list. Cancer drugs, which tend to have lower rebates, have the potential to see the largest net price reductions. (Indeed, only one company in the first round of negotiations took a charge to earnings based on the IRA … and that was the one company with a cancer drug.)

3. The Biden administration said that the medicines chosen are responsible for “$41 billion in spending.” Quick reminder that this is a gross spending number and not what the government (or anyone else) is actually paying. 

4. We’re going to see more lawsuits, I suspect. Teva already filed theirs, and -- as a reminder -- Xtandi’s manufacturer, Astellas, actually filed suit before the first round of drugs was announced, pulling its lawsuit when Xtanti didn’t make the initial list. Does that suit get resurrected? And with GSK and Pfizer also going through this for the first time, two more companies have standing to sue. 

5. Speaking of lawsuits, a quick reminder that there’s still very little settled from the companies that sued after the first list dropped. Three suits remain in federal district court and four are awaiting a decision from various courts of appeal.

6. Nine of the medicines are made by companies that also went through the first round of “negotiations.” I’ll be curious if that experience makes a difference in how those companies approach in the second round (which will, of course, be conducted under a different regime at CMS). 

7. Speaking of the “different regime,” no one is quite sure how the Trump administration is going to use its powers under the IRA. A populist argument would suggest that the incoming administration will really squeeze manufacturers, a traditional conservative argument would hold that CMS may seek to be more hands-off. I’m not ready to make a prediction either way.

8. The market probably isn’t going to react because all of this has been priced in. I hate to keep making this point, but the lack of concern among investors is not evidence that the law will have no impact. It’s evidence of a belief that this news is as expected. 

9. CMS will have 15 roundtables to gather patient input, along with one, single “town hall” on clinical considerations. Written comments are also being solicited, and CMS provided this very user-friendly link. 

10. It’s not a contest, but … I predicted 13 of the meds on the list. Emma Cousin/Inma Hernandez’s team nailed 12 (though they only ventured 13 guesses). The Matthew Vogel/Rena Conti group went 12 for 15. All of us thought Creon would make the list. Nobody is perfect.