First Drugs Subject to Inflation Reduction Act Price Provisions

August 28, 2024

CMS Unveils Drug Price Cuts Amid Concerns for Medicare and Innovation

The Centers for Medicare & Medicaid Services (CMS) announced recently the prices that they have set for the first 10 medications as an outcome of the Inflation Reduction Act’s drug provisions.


For the first time, the law provides Medicare the ability to directly “negotiate” (in effect, set, as otherwise significant penalties are imposed) the prices of certain high expenditure, single source drugs without generic or biosimilar competition.


These prices will go into effect by 2026 for patients enrolled in Medicare prescription drug coverage, with an estimated $1.5 billion in overall savings expected under the standard benefit design.


The Biotechnology Innovation Organization (BIO), of which MichBio is a state affiliate of, issued a statement regarding CMS’ announcement. Despite CMS claims regarding savings, the impact of negotiated prices on patients at the pharmacy counter is currently unclear. CMS did not disclose what evidence was used when setting prices, what stakeholders it sought input from, or whether it has plan to protect patient access and out-of-pocket spending. The concern is that price setting could potentially impact investment decisions in new medicines and prices charged by private payers.


MichBio, along with its national partners, BIO and PhRMA will continue to advocate for the adoption of efforts to mitigate some of the most fundamentally damaging provisions of the Inflation Reduction Act, including the EPIC Act and ORPHAN Cures Act, to ensure that the IRA legislation does not further diminish the development of sorely needed drug treatments.

RECENT ARTICLES

April 24, 2025
Prenuptial Patenting: Responsible Engagement with Engineering Firms
April 24, 2025
PharmOptima, a Poratge, Michigan-based preclinical contract research organization (CRO) is advancing drug discovery through its comprehensive suite of services. Specializing in in-vivo ADME/PK, ocular research, as well as regulated large and small molecule bioanalytical and ligand binding services, PharmOptima supports clients in optimizing drug development programs efficiently and effectively. With a staff averaging 11 years of industry experience and multiple individuals with advanced degrees, PharmOptima also boasts one of the most capable and engaging teams in the industry. The company collaborates with board-certified veterinary ophthalmologist Dr. Ryan Boyd, further enhancing its ocular research capabilities. PharmOptima's team of experts is dedicated to providing high-quality services to the pharmaceutical biotechnology industries. Looking ahead, PharmOptima scientists will be presenting posters at the 2025 The Association for Research in Vision and Ophthalmology (ARVO) conference, showcasing their latest research and innovations in ocular drug development. For more information visit www.pharmoptima.com .
April 24, 2025
Two bills, HB 4332 and HB 4333 were recently re-introduced that would prohibit pathogen gain-of-function (GoF) research. Given that the House is now Republican-led raises concerns for MichBio and others that the legislation might gain traction due to misinformation over biosafety and pandemic origins. MichBio opposes such broad legislative bans as they risk undermining critical scientific progress, public health preparedness, and economic innovation. GoF research has been instrumental in developing life-saving therapies and vaccines. For instance, viral vector-based gene therapies, such as Sarepta's Elevidys for Duchenne muscular dystrophy, and oncolytic virotherapies like Amgen's Imlygic for melanoma, rely on genetically modified viruses to deliver therapeutic genes or selectively destroy cancer cells. These advancements stem from GoF methodologies that enhance viral capabilities for therapeutic purposes. Moreover, GoF research has played a pivotal role in vaccine development. Examples like the AstraZeneca and Janssen COVID-19 vaccines and Merck's ERVEBO vaccine against Ebola employs a genetically modified virus to confer protection, underscore the public health benefits derived from GoF studies. ​ Contrary to concerns that GoF research operates without sufficient oversight, multiple layers of regulation are in place. Since 2017, the U.S. Department of Health and Human Services has implemented a framework to evaluate and guide funding decisions for GoF research, particularly those involving potential pandemic pathogens. This framework includes stringent safety protocols, risk assessments, and ethical reviews. ​ MichBio is most concerned that any legislative bans that broadly define and prohibit GoF research risk stifling innovation across various scientific fields. Such bans could inadvertently encompass research in virology, microbiology, molecular biology, and synthetic biology—disciplines vital for developing new therapies, sustainable agricultural practices, and environmental remediation technologies. ​ In turn, state-level bans on GoF research could have detrimental effects on local economies and academic institutions. Such a ban could impede research critical to understanding and combating diseases, leading to a loss of federal and philanthropic funding. This could hamper the growth of the Michigan's biotech and biomedical sectors. ​  MichBio advocates for a balanced approach that reinforces existing oversight mechanisms and fosters transparent, responsible research practices essential to safeguard both public health and scientific progress.