AstraZeneca, Bristol Myers Squibb to participate in Medicare drug price negotiations

AstraZeneca, Bristol Myers Squibb and Boehringer Ingelheim on Wednesday told CNBC they will agree to participate in the first round of Medicare drug price negotiations, even after all three drugmakers sued to halt the process last month.

AstraZeneca’s Type 2 diabetes drug Farxiga, Boehringer Ingelheim’s own diabetes drug Jardiance and Bristol Myers Squibb’s blood thinner Eliquis are among the first 10 drugs selected for price talks with Medicare. These three companies are the first to say that they’ll comply with negotiations to reduce the cost of prescription drugs to older Americans.

Manufacturers of the other seven drugs selected have until Oct. 1 to sign an agreement to participate in the process. Those companies did not immediately respond to CNBC’s request for comment about their intentions.

“We remain committed to ensuring patients have access to FARXIGA and plan to participate in the process outlined by CMS to communicate the value of FARXIGA to people covered by Medicare,” AstraZeneca said in a statement to CNBC, referencing the Centers for Medicare and Medicaid Services.

Boehringer Ingelheim, which is privately held, said in a statement it is “committed to engaging in open and transparent conversations” with CMS.

A spokesperson for Bristol Myers Squibb said the company has “no choice other than to sign the ‘agreement. Bristol Myers Squibb spokesperson said the company has “no choice but to sign the ‘agreement’. That is not a real choice,” the spokesperson said.

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.

Bristol Myers, AstraZeneca, Boehringer Ingelheim and other drugmakers like

Johnson & Johnson and Merck have filed at least eight separate lawsuits in recent months seeking to declare the negotiations unconstitutional. A lawsuit filed by the Chamber of Commerce – one of the largest lobby groups in the country – seeks a preliminary order to stop the negotiations. The pharmaceutical industry is opposed to the process, as it fears that it will harm its profits, revenue growth and drug innovations. Analysts expect minimal financial losses, initially, for companies. Most of the drugs chosen already have upcoming patent expirations, which are likely to impact revenue. For example, Farxiga’s market exclusivity will end in 2026. This will allow generic alternatives on the market. The Inflation Reduction Act passed Congress narrowly along party lines last year, allowing Medicare to negotiate drug price for the first in its six-decade-long history. The law was a major win for the Democratic Party and a key part of the Biden administration’s effort to control rising drug costs.