New re­search shows Medicare could have saved 5% be­tween 2018-2020, if the In­fla­tion Re­duc­tion Act had been passed in 2018 and Medicare start­ed us­ing the law’s price ne­go­ti­a­tion au­thor­i­ty.

The study pub­lished Fri­day in JA­MA Health Fo­rum — from Har­vard’s Aaron Kessel­heim and Ben Rome, along with Sarosh Na­gar, Alexan­der Egilman, William Feld­man and Jun­yi Wang — looked to eval­u­ate how CMS’ new ne­go­ti­a­tion au­thor­i­ty would be im­ple­ment­ed.

The sim­u­la­tion iden­ti­fied 40 drugs that would have been picked for ne­go­ti­a­tion from 2016-2018, two years be­fore ne­go­ti­at­ed prices would take ef­fect (2018-2020). It in­clud­ed block­busters such as Revlim­id, Hu­mi­ra and Janu­met.

Ac­cord­ing to the Har­vard study, the law re­quires CMS to ne­go­ti­ate a max­i­mum fair price for a drug. The ne­go­ti­at­ed price would then stay in place un­til the cal­en­dar be­gin­ning of the first year, at least nine months af­ter the first gener­ic or biosim­i­lar to a spe­cif­ic drug goes to mar­ket.

How­ev­er, that fair price must fall be­low a “ceil­ing price.” The ceil­ing price can be one of two things, ac­cord­ing to the re­port: the less­er of

• the av­er­age net price for a drug af­ter cer­tain ne­go­ti­at­ed dis­counts and/or re­bates, or
• a per­cent­age of the drug’s non­fed­er­al av­er­age man­u­fac­tur­er price (non-FAMP).

That per­cent­age of the av­er­age man­u­fac­tur­er price changes ac­cord­ing to how long the drugs have been ap­proved. For drugs ap­proved less than 12 years ago, the ceil­ing price is 75% of the non-FAMP price. In the 12-16 year gap, it’s 65%, and then it drops down to 40% for any­thing longer than that.

How­ev­er, since the mid­dle 65% cat­e­go­ry will not be in­clud­ed un­til 2030, the re­searchers mod­eled that the ceil­ing price would be 75% of non-FAMP for any drug that was ap­proved less than 16 years ago — for the first five years.

Tak­ing all this in­to ac­count, if the Act was passed in 2018, spend­ing at ceil­ing prices would have been re­duced by an es­ti­mat­ed $26.5 bil­lion.

While there were a few lim­i­ta­tions, such as sav­ings be­ing like­ly to grow over time and not ac­count­ing for sav­ings out­side of Medicare, the re­searchers added that the drug with the largest es­ti­mat­ed sav­ings from ceil­ing prices was lenalido­mide/Revlim­id, which cost Medicare $14.1 bil­lion be­tween 2018-2020 and would have cost on­ly $5.2 bil­lion at the ceil­ing price, cut­ting the price by 63%. Oth­er drugs with es­ti­mat­ed high sav­ings in­clud­ed adal­i­mum­ab/Hu­mi­ra, at 74%.

The group’s find­ings re­flect an­oth­er study on the IRA that came out ear­li­er in 2023 — al­so from Kessel­heim, Rome and Egilman. That study said the In­fla­tion Re­duc­tion Act would have saved Medicare Part B $3.7 bil­lion in the same three years, about 3% of its to­tal spend­ing dur­ing that time.

That study not­ed that it would have been pos­si­ble un­der the law’s new guid­ance on ty­ing price in­creas­es to the rise of in­fla­tion, and 75% of 93 top-sell­ing drugs would have had to owe Medicare re­bates due to price in­creas­es above in­fla­tion.

A California judge will allow a plaintiff in a state court case to introduce expert testimony connecting a potential carcinogen in former blockbuster medicine Zantac to cancer.

The order was handed down on Thursday from state judge Evelio Grillo, who is now allowing both parties to introduce expert testimony in an upcoming trial after what’s known as a Sargon hearing, where a judge determines the admissibility of expert witnesses and expert opinions.

Abbott is renewing its concussion awareness campaign, weeks after the company received FDA clearance for its lab-based traumatic brain injury (TBI) blood test.

The unbranded campaign features three generations of the Melon family — animated talking melons who slip on toys or take a spill while playing pickleball.

“Don’t mess with your melon. If you hit it, get it checked,” a narrator says.