After years of stops and starts, a law was finally passed in Congress this summer to address the rising cost of prescription medicines. The Inflation Reduction Act allows the federal government to negotiate prices for some costly drugs, but only a small number that cost the government the most money. But those medicines can’t have any competing products on the market, and negotiations can’t begin until a small-molecule drug has been available for at least nine years and a biologic for 13 years. Moreover, the process does not start until 2026. A separate policy aimed at moderating price growth would make drugmakers pay back Medicare if they hike prices faster than inflation. And in 2025, Medicare beneficiaries will see their costs capped at $2,000 per year.
We spoke with Jim Meyers, a former chief commercial officer and executive vice president at Gilead Sciences, who is now a senior adviser to the Boston Consulting Group and a board member of several biotech companies, about how the pharmaceutical industry is preparing for the changes.
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