Pharmaceutical Giants Brace for Showdown as Medicare Drug Price Negotiations Are Poised For 2024

Astrazeneca PLC Sponsored ADR -0.29% Pre
Bristol-Myers Squibb Company +0.48% Pre
BioNTech SE +1.63% Pre
CVS Health Corporation +0.47% Pre
GlaxoSmithKline plc Sponsored ADR -0.39% Pre

Astrazeneca PLC Sponsored ADR

AZN

68.73

68.54

-0.29%

-0.28% Pre

Bristol-Myers Squibb Company

BMY

48.51

48.51

+0.48%

0.00% Pre

BioNTech SE

BNTX

87.89

86.69

+1.63%

-1.37% Pre

CVS Health Corporation

CVS

68.96

71.02

+0.47%

+2.99% Pre

GlaxoSmithKline plc Sponsored ADR

GSK

40.50

40.09

-0.39%

-1.01% Pre

2024 will mark a pivotal moment for the healthcare industry, particularly in drug pricing negotiations. The forthcoming year will provide the first glimpse into how much Medicare can leverage its newfound power to negotiate down drug prices.

President Joe Biden's Inflation Reduction Act, passed last year, granted Medicare authority to directly engage in price discussions with drug manufacturers, heralding a substantial shift in the program's longstanding history.

The negotiation process initiated by Medicare, set to begin on February 1, will encompass ten prescription drugs from various pharmaceutical giants, including Merck & Co Inc (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and Bristol Myers Squibb & Co (NYSE:BMY), among others. These discussions aim to make costly treatments more accessible for older Americans, with the agreed-upon prices taking effect in 2026.

The eventual price adjustments will dictate the potential revenue loss for drug manufacturing companies in the coming years, CNBC writes

These figures will also offer insights to other pharmaceutical companies regarding the potential impact on their sales should their medications be chosen for future negotiation rounds.

The pharmaceutical industry perceives this negotiation process as threatening revenue growth and drug innovation.

Simultaneously, these negotiations hold substantial significance for patients, offering insight into the potential savings they might experience, crucial amid the escalating challenges many face in affording essential medications.

The upcoming decisions in ongoing lawsuits, primarily led by major pharmaceutical entities and industry groups against the Biden administration, will shape the legal landscape. 

These cases, disputing the constitutionality of the negotiations, will likely make significant progress in appeals courts throughout 2024, potentially accelerating the process toward a Supreme Court resolution by 2025.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image by Steve Buissinne from Pixabay

Every question you ask will be answered
Scan the QR code to contact us
whatsapp
Also you can contact us via