The offers are a significant part of the negotiation process, but they are just the first step. Along with the offers, the government sent the companies the justifications for the prices. But HHS won’t reveal any details until the final offers are agreed to by September.
As PhRMA, the industry’s powerful lobbying group, noted: No member of the public will have any information to understand how the Centers for Medicare & Medicaid Services weighted the factors or rated therapeutic value of a product that led to the starting price.
Administration officials said the drug companies were welcome to disclose the offers, but it’s unlikely that will happen. The federal government and manufacturers will hold three meetings between now and when negotiations are scheduled to end in August.
“It is a huge step and has been a long time and coming. Through the actions of Medicare and with all 10 companies negotiating, we are very much on our way to lower costs,” White House domestic policy adviser Neera Tanden said in a briefing Wednesday.
The companies are also engaged in active litigation against the administration. Until those lawsuits play out, it’s unclear if the negotiation program will even survive — though judges in the cases argued so far have appeared skeptical of the industry’s arguments.
The industry has long argued that negotiation will stifle private innovation and discourage companies from bringing new drugs to the market.
The politics are clear though, and the White House and HHS have been loudly promoting the effort.
“Medicare is no longer taking whatever prices for these drugs that the pharmaceutical companies demand,” President Biden said in a statement.
