By Michael Erman and Patrick Wingrove

(Reuters) – All of the drugmakers that make the ten prescription medicines topic to the first-ever worth negotiations for the U.S. Medicare well being program, together with Amgen (NASDAQ:) and Novartis (SIX:), mentioned they signed on to take part within the talks by the Oct. 1 deadline.

The penalties for not doing so would have been steep: drugmakers must pay 65% to 95% taxes on their drug’s Medicare gross sales or withdraw all of their merchandise from the Medicare and Medicaid packages, which collectively present well being advantages to 158 million Individuals.

“Merck will signal the preliminary settlement with CMS below protest,” the U.S. firm mentioned in an announcement. “The selection between doing so and weathering the … huge fines and taxes is not any selection in any respect”

No less than seven of the drugmakers have sued the U.S. Division of Well being and Human Providers, which oversees the Medicare company, calling the method unconstitutional worth setting.

On Friday, a federal decide rejected an try by the U.S. Chamber of Commerce to dam this system in a lawsuit. Danish drugmaker Novo Nordisk (NYSE:) filed its personal lawsuit on Friday within the U.S. District Courtroom in New Jersey.

The U.S. Facilities for Medicare & Medicaid Providers (CMS), didn’t instantly remark.

CMS selected the medication based mostly on sure standards set out by Medicare. They have to be offered in pharmacies, not have substantial generic competitors, and have been in the marketplace for not less than 9 years – 13 for extra advanced biotech medication.

The medication concerned within the first spherical of worth talks are: blood thinner Eliquis from Bristol Myers (NYSE:) Squibb and Pfizer (NYSE:); Merck & Co’s diabetes drug Januvia; Eliquis rival Xarelto in addition to arthritis and Crohn’s illness medication Stelara from Johnson & Johnson (NYSE:); AbbVie (NYSE:)’s leukemia therapy Imbruvica; Amgen’s rheumatoid arthritis therapy Enbrel; Boehringer Ingelheim and Eli Lilly (NYSE:)’s diabetes drug Jardiance; and insulin from Novo Nordisk.

Solely the 9 main producers of the ten medication had been required to log off on the take care of CMS.

The brand new costs, which shall be required to be not less than 25% decrease than their present listing, would take impact in 2026. This system goals to save lots of $25 billion per 12 months on drug costs by 2031.

The businesses can have an opportunity to satisfy with CMS later this autumn and the regulator will ship them a proposal for its “most honest worth” for the medication by Feb. 1, 2024.

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