All the drugmakers that make the 10 prescription medicines subject to the first-ever price negotiations for the U.S. Medicare health program, including Amgen and Novartis, said they signed on to participate in the talks by the Oct. 1 deadline.
The penalties for not doing so would have been steep: drugmakers would have to pay 65% to 95% taxes on their drug’s Medicare sales or withdraw all of their products from the Medicare and Medicaid programs, which together provide health benefits to 158 million Americans.
“Merck will sign the initial agreement with CMS under protest,” the U.S. company said in a statement. “The choice between doing so and weathering the … massive fines and taxes is no choice at all”
At least seven of the drugmakers have sued the U.S. Department of Health and Human Services, which oversees the Medicare agency, calling the process unconstitutional price setting.