More than a decade after Democrats first tabled the proposal, Medicare is finally ready to begin negotiating prices for some prescription drugs.

This week, the federal government announced the 10 drugs that will be included in the first round of negotiations. The new prices will take effect in 2026.

The 10 drugs on the list make up a diverse set. Some are taken from millions of people with a price tag of a few thousand dollars a year. Others cost more than six figures a year and are taken from far fewer patients. Taken together, the list represents the many ways high drug prices put pressure on both patients and insurers and increase the risk that people won’t have access to the drugs they need.

Even if you don’t take one of these drugs, negotiations should help you if you’re on Medicare. Congress used estimated savings of $99 billion over 10 years to limit annual out-of-pocket costs to $2,000 for all Medicare beneficiaries.

Everyone will benefit, Stacie Dusetzina, a professor of health policy at Vanderbilt University who sits on the program’s congressional advisory committee, told me. You have the security of a $2,000 limit.

The negotiating program represents a major milestone for the US healthcare system: The federal government’s largest healthcare program (in terms of spending) is using its enormous financial leverage to try to stem high prices set by drugmakers for their products. The United States pays more for prescription drugs than any other country in the world and yet, compared to other nations’ health systems, the American government has had limited power in trying to lower prices. This new program, created by the Inflation Reduction Act, gives Medicare a powerful new tool.

Now that the top 10 drugs have been selected, the process can begin. Here’s how it will play out:

1. Drugmakers have one month to sign an agreement to participate in negotiations and submit data for Medicare to consider them for the negotiated price
2. By February 1, 2024, Medicare will offer its upfront pricing on select drugs; the producers then have one month to accept or submit a counter offer
3. There will be an opportunity to negotiate during the spring and summer of next year. Then, in September 2024, Medicare will announce final pricing. The program will start paying those prices in 2026.

The process will begin anew when Medicare announces 15 more drugs that it will be open to negotiation in February 2025, with pricing going into effect in 2027. In each subsequent year, additional drugs will be added to the negotiable program.

That is, if the courts will allow negotiations to proceed. The pharmaceutical industry has already filed a series of lawsuits, each with its own legal rationale, to stop the program before it starts. Many legal experts believe that this litigation will fail, how can the government run a sustainable program if it has no discretion over the prices to pay for drugs? but the rulings in these cases will ultimately determine whether Medicare drug negotiations can test their potential to save money for U.S. patients and their government.

Meanwhile, the drugs Medicare plans to negotiate on can be divided into two groups.

1) The rather expensive drugs for chronic diseases taken by hundreds of thousands or even millions of people

Seven of the 10 drugs announced for trading fall into this category:

• Eliquis, which treats and prevents blood clots (list price $561 for a one-month supply)
• Jardiance, which treats diabetes and heart failure (list price $570)
• Xarelto, which treats and prevents blood clots and reduces related risks for people with heart disease (list price $542)
• Januvia, which cures diabetes (list price $586)
• Farxiga, which treats diabetes, heart disease and chronic kidney disease (list price $549)
• Entresto, which treats heart failure (list price $545)
• A class of insulin injectors and related refill products: Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen and NovoLog PenFill

What these drugs have in common is that many Americans take them—perhaps because diabetes and heart disease are among the most common chronic health conditions in the United States—and must take them on a regular basis. More than 580,000 people on Medicare took Entresto from June 2022 to May 2023; more than 1 million have been prescribed Xarelto and Jardiance. Eliquis was the most commonly used drug on the list, being taken by more than 3.7 million people. At that time, the cost of Medicare was approximately $16.5 billion.

Even though most people who get Medicare do not pay list price, prescription drug coverage may still affect the prices you pay. Patients may have a deductible to meet before their benefits take effect or they may be responsible for paying coinsurance, which is calculated based on the list price.

These drugs also help people manage chronic health conditions to avoid more costly health problems in the future. The consequences can be severe if people are forced to give up medications due to cost. Insulin in particular has been subjected to rationing, which in the long term can reduce its effectiveness and, in some individual cases, has led to serious emergencies and even death of patients. (The IRA also included a provision to cap monthly insulin costs to $35 for Medicare patients.) Research has found that even an extra $10 cost can lead to people taking fewer medications than they need.

Medicare negotiations won’t solve all of these problems. But they will save patients and the program, and under the IRA, these government savings are used to limit drug costs for seniors participating in the program.

2) Super expensive drugs for people with serious and life-threatening illnesses

The second group of drugs under Medicare talks are being taken by a much smaller group of people, but for people who need them, their ability to afford them could determine in the very near future whether they live or die:

• Enbrel, which treats rheumatoid arthritis, psoriasis, and psoriatic arthritis (list price $1,762 for a one-week dosage)
• Imbruvica, which treats various blood cancers (list price $13,546 for about one month of tablets)
• Stelara, which treats psoriasis, psoriatic arthritis, Crohn’s disease, and inflammatory bowel disease (list price $25,497 for an 8-week supply)

The number of affected Medicare patients ranges from about 20,000 for Stelara and Imbruvica to nearly 50,000 for Enbrel. However, these drugs cost the Medicare program more than $2.6 billion each from June 2022 to May 2023.

These patients in particular will benefit from the negotiated pricing and the new cap established by Congress, Dusetzina said. Under the old Medicare subsidy model, they would have had to spend up to $10,000 a year on their drugs. Now their costs will not exceed $2,000 a year.

This is the tragedy of America’s drug price crisis. The pharmaceutical industry has developed and produced amazing treatments that can stop cancer or help people live with otherwise debilitating illnesses.

But too often these treatments come at a price that patients can’t afford or require health insurers to raise premiums so that everyone can cover the costs, or both. Our notoriously ungenerous health insurance made the affordability crisis worse, but so did the carte blanche granted to pharmaceutical companies under the current political regime: they can set whatever list price they like while their products are protected by a patent . Dusetzina told me she wouldn’t be surprised if the next rounds of drugs target more expensive drugs for severe acute illnesses like cancer, given that the initial list is more skewed toward (relatively) low-cost drugs for chronic illnesses. .

Historically, drug makers have argued that health insurance companies would negotiate these prices down, so no one would have to pay them. They would even say that, for Medicare, the different private Part D plans were already negotiating prices on behalf of their patients.

It was true. But it prevented Medicare from using all of its leverage to try to cut prices for everyone because each Part D plan represented fewer people than Medicare as a whole. (There are more than 800 Part D plans.) Now, things are finally about to change.

Could a new weight-loss drug open the door to anti-aging therapies?

Preparing for various conference presentations and not wanting to repeat last year’s talk, I wanted to see what was happening outside of our longevity industry to draw parallels to our industry’s progress.

Some of the questions I wanted to answer:

Are we at the peak of the longevity hype? Answer: No, not yet, but Bryan Johnson’s work is raising awareness of humans’ ability to roll back biological age. Kim Kardashian’s whole-body MRI is a harbinger of longevity awareness and, in fact, prompted us to launch our own survey of longevity clinics: You need to know what’s going on.

Will the FDA classify aging as a disease? Answer: still soo off if ever if needed.

But frame the question in a different way Will a longevity drug need FDA approval to be commercially successful? Answer: No, because all longevity drugs will have a positive effect on at least one disease of aging, they will eventually receive approval. If a drug is based on an aging pathway that demonstrates efficacy in more than one aging-related disease, then who’s going to complain? After all, it’s about more revenue for the pharmaceutical sector, more prescribing options for doctors, more patients under management, and less consequences of the diseases of aging for governments.

Longevity.Technology: Yes, system rejuvenation is the panacea for longevity therapies that turn back the clock in all cells and, therefore, organs. But what about a drug that addresses multiple diseases of aging, basing its aging mechanism on a recognized aging pathway, mechanism, or hallmark? Yes, that would work.

Semaglutide, sold under the brand names Ozempic, Wegovy and Rybelsus, and referred to in some markets as ‘skinny jab’, is the weight loss drug recently approved for use in the UK’s NHS for millions of people.

Not thousands, millions!

Used for the treatment of type 2 diabetes, Semaglutide is an anti-obesity drug prescribed to lose weight, but being overweight is not a disease (in most cases). Being old is also not a disease – an interesting parallel.

Based on the GLP-1 hormone, Semaglutide can be used for conditions other than weight loss; it has also demonstrated efficacy in improving symptoms related to heart failure in human studies [1]as well as neuroprotective properties in mouse studies, promoting DNA repair in neurodegenerative diseases [2].

So the “scarce” drug eliminates diabetes, cardiovascular diseases and potentially neurodegenerative ones: a drug for longevity?

In the United States alone, these age-related diseases cost $363 billion, $470 billion, and $361 billion, respectively, each year.

The U.S. Food and Drug Administration has already approved Wegovy (Semaglutide) Injection (2.4 mg once weekly) for chronic weight control in obese or overweight adults with at least one weight-related condition (such as high blood pressure of type 2). diabetes or high cholesterol) [3].

Injected weekly, the drug must be prescribed by a specialist; a similar drug, liraglutide, marketed as Saxenda and made by the same company, is already available, but must be injected daily [4].

So what does this have to do with the longevity industry? Well first, the longevity revolution will be a slow revolution, success may creep up on us with Semaglutide, perhaps this creep may have already begun.

Since development cycles are so long in the therapeutic industry and the struggle to bring a compound to market through safety and efficacy is so daunting, don’t expect a big bang any time soon.

Consider the switch instead. Switch the weight loss theme to an aging theme in these August 2023 Financial Times headlines and you’ll get an idea of ​​how successful longevity therapy will pan out once it gains market attention and peak of the hype:

Weight Loss Drugs: Will Health Systems and Insurers Pay for the ‘Lean Jabs’?
Anti-aging drugs: Will health systems and insurers pay for the ‘longevity shots’?

Chinese pharmaceutical makers are developing copycat versions of the “wonder” weight-loss drug
Chinese pharmaceutical manufacturers are developing copycat versions of the longevity ‘miracle’ drug

Do Big Pharma Get Longevity?

Give me a ‘hell yes’. Our team works with the investment arms of Tier 1 pharmaceutical companies through our separate investment brokerage operation, they are interested in longevity biotechnologies working on aging pathways and diseases. Just check Novo Nordisk’s share price to see the benefits (or even) the potential for future approvals and orders.

It’s not often you have a 100-year-old company and still grow at 30%, Novos chief executive Lars Fruergaard Jrgensen told reporters. The company now expects sales to grow 27-33% this year and operating profit to rise 31-37%. [5].

As this drug and others make their way to market and researchers test their effectiveness in targeting other diseases related to aging, we will see the biotech longevity thesis play out in national health care systems and clinics around the world.

To revisit the questions I wanted to answer:

Are we at the peak of the longevity hype? Not yet, but Semaglutide is an interesting example of how things could be.

Will the FDA classify aging as a disease? As Semaglutide proves, you don’t have to.

[1] https://www.bhf.org.uk/what-we-do/news-from-the-bhf/news-archive/2023/august/wegovy-weight-loss-drug-has-benefits-for-people- with heart failure and obesity
[2] https://pubmed.ncbi.nlm.nih.gov/30741689/
[3] https://www.fda.gov/news-events/press-announcements/fda-approves-new-drug-treatment-chronic-weight-management-first-2014
[4] https://www.telegraph.co.uk/lifestyle/wellbeing/diet/11367203/Daily-injection-that-is-better-than-dieting-or-exercise-on-NHS-soon.html
[5] https://www.ft.com/content/710c1048-7717-4553-a831-9e13ff27fb6c

Still, the effort to reframe the drug pricing debate comes as Democrats prepare to wrestle the issue up and down next year’s ballot against a Republican Party unlikely to give ground in campaign attacks and more likely to focus on the border and on inflation.

A new poll conducted by the nonprofit KFF shows that 58% of independent voters trust Democrats will lower drug costs compared to 39% of Republicans.

If they want to run their campaigns based on keeping pharmaceutical companies high profits, welcome, Senator. Amy Klobuchar (D-Minn.) told POLITICO. Why don’t they try and see how well President Biden is doing? Because people will understand that older adults want to see cheaper drugs.

However, Republicans are working out the best strategy to thwart early Medicare drug price talks.

Republicans need to figure out how to pursue it, said Joe Grogan, a Republican strategist who served as a domestic policy adviser to former President Donald Trump. They prosecute him by confronting him directly: he is killing clinical programs by substantially limiting the amount of treatments.

Grogan said the negotiation process can stifle innovation by asking makers of select drugs to agree to a final negotiated rate or drop Medicare and Medicaid, which can amount to 40 percent of total revenue depending on the drugmaker.

One company after another is making trade strategy changes because it has to get ahead of government price-fixing and ultimately [the] price extortion, Grogan said.

Some companies have said they are withdrawing funding for some clinical programs. Eli Lilly, for example, accused the IRA of withholding a $40 million cancer drug because of the trading scheme, according to a November report in Endpoints News.

Grogan added that drug companies may decide to no longer fund clinical trials that seek new uses for a drug already on the market.

It’s not about negotiating prices, it’s about setting them, and companies are responding by scrapping programs that will no longer be profitable in a high-risk industry to bring to market, he said.

But the question is what Republicans want and what they want [what is] the alternative here? White asked.

Congressional Republicans criticized Biden’s announcement on drug prices Tuesday, saying they will impose crippling price controls.

I hope our colleagues on both fronts can unite to mitigate these devastating effects and advance consensus-based, market-driven solutions to address access and affordability challenges, said Sen. Mike Crapo (R-Idaho), the top Republican on the Senate Finance Committee.

But White admitted that right now Republicans don’t have a plan that shocks voters or that resonates with voters and is in stark contrast to what Democrats are offering.

The Republican-led House is working on bills to reform drug benefit managers, who some Republican lawmakers say act as middlemen who do not pass on discounts negotiated with drugmakers to patients.

Florida Gov. Ron DeSantis, who is second behind Trump in most polls, has signed into law his own bill to regulate PBMs in the state. DeSantis’ campaign did not return a request for comment on Tuesday’s announcement.

This is a gimme, it seems to me. PBMs are everyone’s favorite villain these days, said Joe Antos, a senior fellow at the American Enterprise Institute think tank.

So far, most 2024 campaigns have not presented detailed health policy plans and have been largely silent on drug pricing in particular.

One of the exceptions is the favorite – Trump.

He promises to roll back an executive order issued while in office that required the federal government to pay the same price for pharmaceuticals as overseas countries. The Biden administration withdrew the ordinance in 2021 after a federal judge overturned it.

We have been ripped off by everyone for so many decades. We are tired of it. It’s not going to happen, Trump said in a video on his campaign website.

Former Vice President Mike Pence has made sweeping statements about improving transparency and competition to reduce costs. He also proposed reviving Operation Warp Speed, the federal program created to accelerate vaccines against Covid-19, but for new drugs.

Strategists say candidates will need to explain their vision for health care as the campaign heats up. Except for abortion, health care has been largely absent from the first debate between Republican presidential candidates in Milwaukee, Wisconsin, last week.

There is an opportunity and an obligation in the presidential campaign, Grogan said. Trump’s allegations have dominated much of the debate, but economic visions will need to be fleshed out.

David Lim contributed to this report.