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Good afternoon! The first round of the Biden administration’s Medicare drug price negotiations is nearly finished, with two major deadlines approaching.
President Joe Biden’s signature Inflation Reduction Act gave Medicare the power to directly hash out drug prices with manufacturers for the first time in the federal program’s nearly six-decade history. That process aims to make expensive medications more affordable for older Americans, but the pharmaceutical industry argues that it is a threat to their revenue, profits and drug innovation.
The government and manufacturers have been in talks since February, when Medicare sent its initial price offer for each of the 10 medications selected almost a year ago. That includes diabetes treatments from Merck, AstraZeneca and Boehringer Ingelheim and blood thinners from Johnson & Johnson and Bristol Myers Squibb, among other drugs.
The negotiation period officially ends next Thursday. Medicare will publish the final agreed-upon prices for the medications by the beginning of September, though the exact timing is still unclear.
Those prices will go into effect in 2026.
Both the government and drugmakers have largely remained tight-lipped about what negotiations have been like. But companies have said they have factored any impact from the price talks into their long-term financial outlooks.
“We have received the final numbers from the government. We’re not disclosing that at this time,” said Jennifer Taubert, J&J’s worldwide chairman of innovative medicine during an earnings call last week. “While we are not in alignment with the [Inflation Reduction Act] and the price-setting process, those numbers have been included in the guidance that we provided last year … that still looks very good to us today.”
Meanwhile, lawsuits brought by Merck, Novartis and Novo Nordisk against the negotiations are awaiting decisions from district courts. Each case brings claims that overlap with suits from AstraZeneca, Boehringer Ingelheim, and Bristol Myers Squibb and J&J that have been rejected in recent months.
After this initial round of talks, Medicare can negotiate prices for another 15 drugs for 2027 and an additional 15 in 2028. The number rises to 20 negotiated medications a year starting in 2029 and beyond.
Vice President Kamala Harris, the front-runner to replace Biden as the Democratic candidate for president after he dropped out of the 2024 race Sunday, would likely try to expand the scope of negotiations if elected, experts told CNBC.
Feel free to send any tips, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.
Latest in health-care technology
Abridge, Epic and Mayo Clinic are bringing generative AI to nurses
Artificial intelligence tools are coming to nurses.
Epic Systems, Abridge and Mayo Clinic on Tuesday announced they are building a new AI-powered solution to help automate some of the note taking that nurses have to do.
Like doctors, nurses are required to complete a mountain of administrative tasks like paperwork, and the workload contributes to high burnout across the health-care field. At Mayo Clinic, for instance, which provides care to more than 1.3 million patients globally each year, documentation is one of the biggest pain points for nurses, said Ryannon Frederick, chief nursing officer at Mayo Clinic.
“Right now in our current environment, they’re spending a significant amount of time on work that’s required, but doesn’t necessarily use the full skill set that they bring to the table,” Frederick told CNBC in an interview.
“We have to find ways to make the work easier for them so that we’re using their skills, their expertise, their intelligence, in the places where it’s most needed for patients,” Frederick added.
Abridge, founded in 2018, originally developed an AI documentation tool for doctors that it has deployed across health systems like Sutter Health, Yale New Haven Health System, Emory Healthcare and others. When doctors meet with a patient, they can use Abridge to consensually record their conversations and automatically turn them into clinical notes and summaries.
In March, Abridge CEO Dr. Shiv Rao said the company is saving some physicians as much as three hours a day. The natural next step is to tailor the technology and bring those benefits to nurses.
“We say that there’s a public health emergency around clinician burnout and staffing shortages, but that public health emergency, I’d say, is nowhere more acute than on the nursing side,” Rao told CNBC in an interview.
Abridge’s technology integrates directly with Epic, a health-care software vendor that houses the patient medical records for more than 305 million people worldwide. Garrett Adams, vice president of R&D at Epic, said the companies have been collaborating on the new nursing tool for the past year through Epic’s “Workshop” program. Microsoft’s Nuance Communications, which offers a competing AI documentation tool, also participates in the program.
Frederick said Mayo Clinic has seen some early prototypes of Abridge’s nursing tool and tested it in a simulation center, but it’s still early days. It’s important to ensure that the solution actually solves problems for her staff, she said, so Mayo Clinic will continue to test and evaluate it before rolling it out on a larger scale.
Abridge plans to bring its nursing documentation tool to other health-care organizations in the future.
Feel free to send any tips, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.