As the administration continues to falsely claim Medicare “negotiation,” keep these points in mind

Today, as a part of the implementation of the IRA, the Centers for Medicare & Medicaid Services (CMS) sent the biopharmaceutical companies selected for price setting an "initial offer" for what they think the value is for 10 innovative medicines.

As the administration continues to falsely claim that this a “negotiation,” here are three things to keep in mind:

1. The price-setting process is shrouded in secrecy. No member of the public — including patients and providers — will have any information to understand how CMS weighted the factors or rated therapeutic value of a product that led to their starting price, and this process will take place behind closed doors. The agency won’t publicly justify its decisions until 2025, months after it dictates the price of these innovative treatments.

2. Based on what CMS has said, it is clear the patient perspective has been dismissed. As it worked to implement the law, the Biden Administration had an opportunity to heed concerns from stakeholders and help mitigate some of the harm. CMS held so-called “listening sessions” that proved to be an exercise to check the box. Speakers had only three minutes, CMS mandated an onerous sign-up process, and the agency admitted it “will not be responding to feedback…” We have no reason to believe this initial offer values that patient perspective.

3. Despite growing concerns about the tradeoffs required for the government setting prices, the Democrats in Congress and the Biden Administration pushed this partisan law through. Now, they’re rushing to implement this law to earn more political talking points on the campaign trail. Meanwhile, we are starting to see the harmful tradeoffs many people feared, including the loss of new treatments that could help fight cancer and other devastating diseases.

And let’s not forget, this is not a true negotiated offer in any sense of the word. If at the end of this process, companies refuse the government’s edict, they face either a punitive tax up to 19 times the revenues of the medicine or the removal of all medicines from Medicare and Medicaid. Neither outcome is feasible. 

The bottom line: This process is a black box that allows a few government bureaucrats to make politicized decisions about the value of medicines and with no accountability to patients or the public.