Medicare Drug Price Negotiation Program Faces Backlash from Pharmaceutical Industry

A fight is brewing over the Medicare drug price negotiation program after the Trump administration proposed to consider additional forms of drugs for price cuts. The proposal would allow the Centers for Medicare & Medicaid Services to select a fixed-dose combination drug for negotiations if it doesn't have a "clinically meaningful difference" compared to its original drug with the same active moiety or ingredient. This has raised concerns from the pharmaceutical industry.

A new battle is brewing over the Medicare drug price negotiation program after the Trump administration proposed to consider additional forms of drugs for price cuts. The Centers for Medicare & Medicaid Services (CMS) has proposed that fixed-dose combination drugs, which contain multiple medications in a single dosage form, could be selected for negotiations if they lack a "clinically meaningful difference" compared to their original drug with the same active moiety or ingredient [1].

The pharmaceutical industry has expressed significant resistance to this proposal, questioning the government's legal authority and statutory basis to implement it. If finalized, the move could potentially impact top cancer drugs such as Merck & Co.'s Keytruda, Bristol Myers Squibb Co.'s Opdivo, and Johnson & Johnson's Darzalex, all of which are fixed-dose combinations [1].

The proposal deviates from previous guidance, which stated that fixed combinations would not be aggregated with products containing only one of the active moieties or ingredients. The latest guidance now indicates the government may exercise more discretion in grouping these drugs, even if they have different administration routes, labels, and patient population targets [1].

The industry argues that the proposal lacks legal and scientific grounds, as it would be inconsistent with the Food and Drug Administration's regulations and how Congress outlined the program under the Inflation Reduction Act in 2022. Fixed-dose combination drugs are defined as two or more drugs combined in a single dosage form, where each component contributes to the claimed effects and the drug is safe and effective [1].

Drugmakers have long opposed the government's definition of a "qualifying single source drug," which determines that two or more drugs approved under distinct FDA applications should be treated as one. This has led to ongoing lawsuits challenging the agency's definition [1].

Despite the pushback, the government is "rightly asking the question" of whether these reformulation drugs should be exempt from negotiations, according to Anna Kaltenboeck, president of Verdant Research. Reformulated drugs like Keytruda and Opdivo, which contain hyaluronidase, an active ingredient that doesn't have a standalone therapeutic benefit, could be targeted under the proposal [1].

The proposal aims to prevent drugmakers from resetting the negotiation clock by introducing modified versions of existing drugs, according to Ben Rome, an assistant professor of medicine at Harvard Medical School. CMS could negotiate both the original and reformulated products together, recognizing the added value of the reformulated drug [1].

The Trump administration is set to finalize the draft guidance featuring the proposal this fall, which is the first move under the Medicare drug price negotiation program. Legal challenges are expected as the industry continues to challenge the program's implementation [1].

References:
[1] https://news.bloomberglaw.com/health-law-and-business/trumps-first-drug-negotiation-move-sparks-combo-medicine-fight