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The pharmaceutical industry is watching two major deadlines heading into the weekend, and they both have big implications for Medicare drug price negotiations.
Exactly a month ago, the Biden administration named the first 10 drugs that will be subject to those price talks, which aim to rein in the rising cost of prescription drugs for older Americans.
The manufacturers of those drugs have until Sunday to agree to participate in the process. Sunday is also the deadline for a federal judge in Ohio to decide whether to grant a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the U.S., which aimed to block the price talks altogether.
It's unclear when exactly Judge Michael Newman, who is a nominee of former President Donald Trump, will issue a ruling between now and Sunday. Newman also didn't ask any questions to attorneys for the Chamber of Commerce and the Department of Justice during a hearing earlier this month, so we don't have any hints about which way he might be leaning on the issues.
We do know that some drugmakers plan to agree to the negotiations.
In separate statements to CNBC this week, Merck, Bristol Myers Squibb, AstraZeneca and Boehringer Ingelheim said they intend to sign the agreement to engage in the talks. The Centers for Medicare and Medicaid Services will likely announce which drugmakers have agreed next week.
To be clear, agreeing to participate doesn't mean that they support the negotiation process.
Some drugmakers contend that they had no real choice but to engage in the price talks because they could face major penalties if they choose not to.
If drugmakers decline to engage in the negotiations, they could be forced to pay an excise tax of up to 95% of their medication's U.S. sales or to pull all of their products from the Medicare and Medicaid markets, according to CMS.
"We have no choice other than to sign the 'agreement.' If we did not sign, we'd be required to pay impossibly high penalties unless we withdraw all of our medicines from Medicare and Medicaid," a spokesperson for Bristol Myers Squibb told CNBC.
That statement echoes the arguments outlined in at least eight separate lawsuits drugmakers filed in recent months seeking to declare the negotiations unconstitutional. The pharmaceutical industry also contends that the process will threaten revenue growth, profits and drug innovation.
We'll be watching to see how those lawsuits – and the lengthy negotiation process – play out.
Feel free to send any tips, suggestions, story ideas and data to me at annikakim.constantino@gmail.com.
