(The Center Square) – The federal government has named the first 10 drugs that will be subject to the first ever price negotiations by Medicare with drug companies, but a business group remains concerned the effort could backfire and smother drug innovation.

On Tuesday, the U.S. Department of Health and Human Services announced the first 10 drugs covered under Medicare Part D selected for negotiation:

Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill

The list includes some of the most widely used and expensive drugs. Medicare enrollees taking the 10 drugs paid a total of $3.4 billion in out-of-pocket costs in 2022 for these drugs, according to the Department of Health and Human Services.

The drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs. That’s about 20% of total Part D gross covered prescription drug costs between June 1, 2022 and May 31, 2023, according to the Department of Health and Human Services.

“For far too long, pharmaceutical companies have made record profits while American families were saddled with record prices and unable to afford life-saving prescription drugs,” HHS Secretary Xavier Becerra said in a statement.

The savings will mostly go to Medicare.

The negotiations with participating drug companies is slated for 2023 and 2024. Any negotiated prices would become effective beginning in 2026.

The Centers for Medicare & Medicaid Services must publish any agreed-upon negotiated prices for the selected drugs by Sept. 1, 2024. Those prices would go into effect starting Jan. 1, 2026.

In future years, the Centers for Medicare & Medicaid Services will select up to 15 more drugs covered under Part D for negotiation for 2027 and up to 15 more drugs for 2028 (including drugs covered under Part B and Part D), and up to 20 more drugs for each year after that, as outlined in the Inflation Reduction Act, according to the Department of Health and Human Services.

The U.S. Chamber of Commerce, which represents businesses, filed a lawsuit in July against the Department of Health and Human Services and Centers for Medicare & Medicaid Services over the pricing policy. The Chamber has requested a preliminary injunction by Oct. 1, 2023.

The business group said the federal government’s pricing scheme could backfire. U.S. Chamber Executive Vice President and Chief Policy Officer Neil Bradley said that the group supports affordable medicine, but the government’s plan could prove counterproductive.

“The U.S. Chamber supports access to affordable medicine, but a government price control scheme is counterproductive and will restrict access to critical medicines, delay treatment for patients, and jeopardize the search for new lifesaving cures,” Bradley said in a statement. “In its rush to implement the [Inflation Reduction Act’s] price control scheme, the Biden administration failed to examine the likely negative side effects of the policy.”

Bradley also said the price scheme could stifle innovation.

“The nonpartisan Congressional Budget Office reports that this policy will result in fewer new treatments,” he said. “However, there is no way to know if it is likely to be fewer cancer drugs or Alzheimer’s treatments because the administration has not examined the issue. It is a well-known fact that in other countries with similar policies, patients have access to fewer treatments and longer wait times to get treatment. But we don’t know the impact on access and wait times for America’s seniors because the administration failed to conduct any research or analysis.”

Pharmaceutical Research and Manufacturers of America President and CEO Stephen Ubl also warned of consequences from the government’s drug pricing plan.

“Today’s announcement is the result of a rushed process focused on short-term political gain rather than what is best for patients,” Ubl said in a statement. “Giving a single government agency the power to arbitrarily set the price of medicines with little accountability, oversight or input from patients and their doctors will have significant negative consequences long after this administration is gone. And insurance companies and their PBMs may further restrict access to medicines through increased utilization management, higher copays and more restrictive formularies.”

The Pharmaceutical Research and Manufacturers of America also has filed a lawsuit over the practice.

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