Medicare Just Released Their Price Control Plan – Here’s What You Need to Know
Here’s what you should know:
10 drugs are on the list (list and prices in the graphic below)
Prices take effect in 2026
CMS will publish their explanation for the prices in March 2025
Next 15 drugs will be announced in February (total of 60 drugs targeted by the IRA)
What will be the impact? Not as dramatic or draconian as one might expect or that the government might announce. But there will be an impact to the revenues of these enterprises. The S&P Biotech Index responded positively to the news with a 1.7% gain for the day.
The price controls target the “gross list price”.
Our thoughts:
The actual impact on the price discount will most likely be in the 10%-20% range.
This will impact the bottom-line revenue of these enterprises, but not by as much as could have been.
This will put pressure on these large corporations to offset declining revenues with M&A ventures.
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