Ozempic/Wegovy and 14 Other Drugs Selected for Medicare Price Negotiation

The blockbuster diabetes and weight-loss drug semaglutide (Ozempic, Rybelsus, Wegovy) along with therapies for asthma, cancers, and various other conditions were among the 15 drugs the Biden administration selected for the next round of Medicare price negotiation.

“These 15 drugs, together with the 10 drugs that Medicare already negotiated, represent about a third of Medicare Part D spending on prescription drugs, which means the lower prices my Inflation Reduction Act is delivering will put money back in seniors’ pockets across the country,” President Biden said in a press release.

Price negotiation will help the many seniors who are struggling to pay for their medications, HHS Secretary Xavier Becerra said during a call with reporters on Thursday evening.

“Some folks have to cut their pills in half or skip a dose in their prescription so that they can make their prescription last longer until they can afford to buy the next batch of drugs,” he said. “It is not the way to do business, and any doctor would tell you that’s not the way to stay healthy.”

The 15 new drugs eligible for price negotiation are:

• Semaglutide: a GLP-1 receptor agonist used for type 2 diabetes and for obesity
• Linagliptin (Tradjenta): for type 2 diabetes
• Sitagliptin/metformin (Janumet; Janumet XR): for type 2 diabetes
• Fluticasone furoate, umeclidinium, and vilanterol (Trelegy Ellipta): for asthma and chronic obstructive pulmonary disease in adults
• Budesonide/glycopyrrolate/formoterol fumarate (Breo Ellipta): for asthma
• Enzalutamide (Xtandi): for prostate cancer
• Pomalidomide (Pomalyst): for multiple myeloma
• Palbociclib (Ibrance): a CDK 4/6 inhibitor for metastatic breast cancer
• Acalabrutinib (Calquence): a Bruton tyrosine kinase inhibitor for treating chronic lymphocytic leukemia
• Nintedanib (Ofev): for adults with idiopathic pulmonary fibrosis; chronic interstitial lung disease (ILD); and to slow the decline in lung function in adults with systemic sclerosis-associated interstitial lung disease or scleroderma-associated ILD
• Deutetrabenazine (Austedo, Austedo XR): for tardive dyskinesia or Huntington’s disease
• Linaclotide (Linzess): for irritable bowel syndrome with constipation and chronic idiopathic constipation in adults as well as functional constipation in children and adolescents
• Rifaximin (Xifaxan): for reducing the risk of overt hepatic encephalopathy recurrence in adults and for treating irritable bowel syndrome with diarrhea (IBS-D) in adults
• Cariprazine (Vraylar): for schizophrenia and bipolar I disorder
• Apremilast (Otezla): for treating plaque psoriasis and active psoriatic arthritis

The price negotiation program was passed by Congress in 2022 as part of the Inflation Reduction Act (IRA). The measure lowers prescription drug costs for seniors by empowering Medicare to negotiate the cost of prescription drugs.

The first round of price negotiations cut the price of 10 of the most commonly used medications in Medicare — drugs for treating diabetes, heart disease, rheumatoid arthritis and cancer — by 40 to 80%, said health officials. The negotiated prices for the first 10 drugs were announced in August and go into effect on Jan. 1, 2026. Those lower prices will save Medicare beneficiaries an estimated $1.5 billion, CMS Administrator Chiquita Brooks-LaSure said during the press call on Thursday.

“In addition, Medicare negotiations will help states and the federal government achieve savings in Medicaid,” she said.

For this second round of eligible drugs, in keeping with the rules of the IRA, negotiations with the manufacturers are slated to take place in 2025 with negotiated prices taking effect in 2027, according to an HHS press release.

During the period used to gauge a drug’s eligibility for the next round of the program — Nov. 1, 2023 to Oct. 31 2024 — around 5.3 million Medicare Part D enrollees used the 15 drugs, which represent approximately $41 billion in total gross covered prescription drug costs in the Part D program, or 14% of costs over that period.

Together with the total gross covered prescription drug costs of the 10 drugs from the first round of negotiations — totaling about $60 billion over the same period — these drugs account for 36% of total gross covered prescription drug costs in the Medicare Part D program from Nov. 1, 2023 through Oct. 1, 2024 noted an HHS press release.

The next step in the price negotiation process is the signing of negotiation agreements by drug companies. The selected companies will have until February 28 to decide whether to participate in the program.

During the third round of price negotiations, CMS will select up to 15 more drugs, including drugs covered by Medicare part B and Part D, and up to 20 additional drugs for each of the following rounds, as stated in the IRA, according to an HHS press release.

Drug price negotiation is just one of the many provisions in the IRA that save seniors money, Domestic Policy Council Director Neera Tanden said during Thursday’s press call. “President Biden also delivered $35 insulin, as of January 1, a $2,000 cap on total drug spending that will deliver more than $7 billion in savings this year, free vaccines in Medicare used by more than 10 million people, and changes that hold drug companies accountable when they increase prices faster than inflation,” Tanden added.

Becerra pointed out that the $2,000 out-of-pocket cap is a “huge deal” especially for seniors with cancer, or renal disease or those who have suffered a stroke. “Their expenses are out the roof, and know[ing] that they won’t have to spend more than $2,000 out of pocket means they’re probably done paying out-of-pocket [costs] within the first couple of months of a year,” he said.

An HHS press release noted that “[i]n negotiating with participating manufacturers, CMS will consider the selected drug’s clinical benefit, the extent to which it addresses unmet medical needs, and its impact on specific populations, including people who rely on Medicare, among other considerations, such as costs associated with research and development as well as production and distribution for selected drugs.”

Asked whether the incoming Trump administration might pause or change the drug price negotiation program, a senior administration official said she was not able to speculate on potential actions of the next administration.

AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond applauded the administration’s latest efforts to help seniors access critical medications. “For too long, big drug companies have padded their profits by setting outrageous prices at the expense of American lives, forcing seniors to skip prescriptions they can’t afford,” she said in a statement. “The first round of Medicare drug price negotiation made it clear that this process will reduce the prices of these important products and create billions of dollars in savings for Medicare and its beneficiaries.”

Last week, Teva Pharmaceuticals sued the Biden administration over its drug price negotiation program. At least 10 other drugmakers and lobbyists have filed similar lawsuits.

Joyce Frieden, MedPage Today‘s Washington Editor, contributed to this story.