Medicare drug price negotiations list includes Ozempic

The Biden administration on Friday unveiled the next 15 prescription drugs that will be subject to price negotiations between manufacturers and Medicare, kicking off the second phase of a landmark process that aims to make costly medications more affordable for seniors. 

Topping the list are Novo Nordisk‘s blockbuster diabetes injection Ozempic, weight loss shot Wegovy and diabetes pill Rybelsus, which are considered one product in the talks since they all share the same active ingredient: semaglutide. Those treatments fueled the rise of the red-hot obesity market and have been difficult for patients to access due to cost, insurance coverage and supply constraints. 

The agreed-upon prices for the second wave of drugs are scheduled to go into effect in 2027. But it’s unclear whether President-elect Donald Trump could try to change or scale back some of the law’s provisions when he takes office next week. 

Here are the 15 drugs subject to the initial talks this year: 

• Ozempic, Wegovy, Rybelsus, (semaglutide,) made by Novo Nordisk, is used for Type 2 diabetes, weight management, and cardiovascular health
• Trelegy Ellipta, made by GSK, is an inhaler used for chronic obstructive pulmonary disease and asthma
• Xtandi, made by Pfizer, is used to treat prostate cancer in men
• Pomalyst, made by Bristol Myers Squibb, is used to treat a blood cancer called multiple myeloma and a cancer that develops in people with HIV
• Ibrance, made by Pfizer, is used to treat certain breast cancers
• Ofev, made by Boehringer Ingelheim, is used to treat chronic lung diseases in adults.
• Linzess, made by AbbVie and Ironwood Pharmaceuticals, is used to treat irritable bowel syndrome and chronic constipation
• Calquence, made by AstraZeneca, is used to treat certain types of blood cancer 
• Austedo, Austedo XR, made by Teva Pharmaceuticals, is used to treat involuntary movements caused by tardive dyskinesia or Huntington’s disease
• Breo Ellipta, made by GSK and Theravance, is an inhaler used to treat chronic obstructive pulmonary disease
• Tradjenta, made by Boehringer Ingelheim and Eli Lilly, is used for Type 2 diabetes management 
• Xifaxan, made by Salix Pharmaceuticals, is used to treat diarrhea caused by traveling or irritable bowel syndrome
• Vraylar, made by AbbVie, is used to treat schizophrenia, bipolar I disorder, and major depressive disorder
• Janumet, Janumet XR, made by Merck, is used to manage Type 2 diabetes
• Otezla, made by Amgen, is used to treat plaque psoriasis, psoriatic arthritis, and oral ulcers

President Joe Biden’s Inflation Reduction Act gave Medicare the power to directly hash out drug prices with manufacturers for the first time in the federal program’s nearly 60-year history. Some congressional Democrats and consumer advocates have long pushed for the change, as many seniors around the country struggle to afford care.

About 5.3 million people with Medicare Part D coverage used the 15 drugs in the second round of talks to treat various conditions, such as asthma, cancer and Type 2 diabetes, between Nov. 1, 2023, and Oct. 31, 2024, according to a release from the Department of Health and Human Services on Friday. The group of medicines also accounted for roughly $41 billion, or 14%, of total Part D prescription drug costs during that time period, the release added.

When combined with the the 10 medications selected for the first cycle of negotiations, the 25 products represent 36% of all Medicare Part D prescription drug costs during that time period, the release said.

The drugs have been on the market for at least seven years without generic competitors, or 11 years in the case of biological products such as vaccines. 

Medicare has already completed negotiations for the first 10 drugs selected in the program, with new prices set to go into effect next year. In August, the Biden administration said it expects those negotiated prices to save Medicare enrollees around $1.5 billion in out-of-pocket costs in 2026 alone. The government also expects the prices to lead to around $6 billion in net savings for the Medicare program in 2026, or 22% net savings overall.

The negotiation program has also faced a flurry of – so far unsuccessful – legal challenges from the pharmaceutical industry, which views the process as a threat to its revenue growth, profits and drug innovation. 

Stephen Ubl, the CEO of the industry’s biggest lobbying group, PhRMA, said in a statement on Friday that the negotiations are “dangerous for millions of Americans who rely on innovative treatments and created unnecessary, costly bureaucracy.”

“In rushing out this list in their final days, the Biden administration once again fails to address the true challenges facing seniors and Medicare,” he added, contending that the price talks unfairly target drugs that come in pill form much earlier than other types of medicine. PhRMA is eager to work with the Trump administration and Congress to “fix” that “pill penalty,” Ubl said.

In a statement on Friday, Novo Nordisk said it is opposed to the negotiations and has “significant concerns” about how the Biden administration is implementing the law. The Danish drugmaker specifically criticized the decision to combine multiple products that “individually would not meet the requirements of the statute,” referring to Ozempic, Rybelsus and Wegovy being listed as a single product.

Novo Nordisk said its lawsuit against the program is still pending, and it will work with the Trump administration to deliver “meaningful solutions for patients.”

Medicare covers roughly 66 million people in the U.S., and 50.5 million patients are currently enrolled in Part D plans, according to health policy research organization KFF.

Almost 10% of Medicare enrollees ages 65 and older, and 20% of those under 65, report challenges in affording drugs, a senior administration official told reporters last year. 

“Last year we proved that negotiating for lower drug prices works. Now we plan to build on that record by negotiating for lower prices for 15 additional important drugs for seniors,” HHS Secretary Xavier Becerra said in a release. “Today’s announcement is pivotal – the Inflation Reduction Act is lowering prices for people on Medicare. HHS will continue negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs.”

Patient advocacy groups, such as nonprofit AARP, applauded the announcement on Friday.

“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,” Nancy LeaMond, AARP’s chief advocacy and engagement officer, 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.”

Among the 10 drugs listed, Medicare Part D spent the most on Ozempic, Rybelsus and Wegovy, at $14.43 billion, according to a CMS fact sheet on Friday. Nearly 2.3 million enrollees used those drugs during the time period CMS used. 

The plan also spent roughly $5.14 billion on Trelegy Ellipta, which was used by 1.3 million enrollees. Xtandi cost Medicare Part D $3.16 billion despite only 35,000 enrollees using the medication, the fact sheet said. 

Spending for Pomalyst was $2.07 billion, and just 14,000 enrollees used that drug. All other drugs listed cost the program under $2 billion. 

Medicare Part D spent the least on Otezla at $995 million, with 31,000 enrollees who used that medication, according to the fact sheet.

Drugmakers will have until Feb. 28 to decide whether to participate in the program. If a drugmaker declines to negotiate, it must either pay an excise tax of up to 95% of its medication’s U.S. sales or pull all of its products from the Medicare and Medicaid markets. 

Those that participate will engage in a lengthy negotiation process involving months of back-and-forth price offers with Medicare. The federal program determines its initial offer for each medication using sales volume data, the level of federal financial support for the drug’s development and data on pending or approved patent applications and exclusivities, among other information.

After the second round concludes, Medicare can negotiate prices for another 15 drugs that will go into effect in 2028. The number rises to 20 negotiated medications a year starting in 2029. 

The government will only select Medicare Part D drugs for the first two round of negotiations. It will add more specialized medications covered by Medicare Part B, which are typically administered by doctors, in 2028.

But drugmakers will have more opportunities to negotiate with Medicare, based on the final guidance released last year for the second round of price talks. The first optional negotiation meetings will take place after Medicare makes its initial price offers for the 15 drugs, which must be presented by June 1.