Medicare to Negotiate Prices for 15 New Drugs: See List
TL/DR –
The Biden administration has released a list of 15 prescription drugs, including the diabetes and weight loss drugs Ozempic and Wegovy, chosen for Medicare price negotiations due to high prices and public demand for cheaper alternatives. The negotiation process is expected to take place over the coming months, with new prices taking effect in 2027, but will face uncertainty due to silence from the incoming Trump administration on whether it supports the government program. The drugmakers will have over a month to agree to participate in negotiations or face tax penalties, with the only alternative being to withdraw their drug from the Medicare program.
Biden Administration Unveils Next Round of Drugs for Medicare Price Negotiations
The Biden administration recently disclosed its selection for the next round of Medicare prescription drugs for price negotiations. Among the list are Ozempic and Wegovy, the widely sought-after diabetes and weight loss drugs. These drugs have previously faced public backlash due to their high prices, prompting demand for cheaper alternatives.
The list has expanded to 15 drugs, an increase from 10 last year. This marks the beginning of Medicare’s negotiations with drugmakers, which will take place over the next few months. However, the new prices won’t be implemented until 2027.
The upcoming negotiations, mandated by the Inflation Reduction Act of 2022, face an uncertain future under the incoming Trump administration, which has yet to make its stance known regarding this government program.
Selected Drugs for Negotiations Include:
Ozempic; Rybelsus; Wegovy for type 2 diabetes and weight loss; Trelegy Ellipta for asthma; Xtandi for prostate cancer; Pomalyst, a chemotherapy drug; Ibrance for breast cancer; Ofev for idiopathic pulmonary fibrosis; Linzess for chronic constipation; Calquence, a cancer drug; Austedo; Austedo XR for Huntington’s disease; Breo Ellipta, a COPD drug; Tradjenta, a diabetes drug; Xifaxan for diarrhea and irritable bowel syndrome; Vraylar, an antipsychotic drug; Janumet; Janumet XR, diabetes drugs; and Otezla, a psoriatic arthritis drug.
A KFF survey revealed that over half of the public identifies the expansion of prescription drugs subject to negotiations as a top priority. With Ozempic and similar drugs in high demand, potentially increasing costs for taxpayers as Medicare expands coverage for other FDA-approved uses like heart disease risk.
Drugmakers have just over a month to agree to participate in the negotiations or face tax penalties. Opting out of the Medicare program entirely is the only way to evade the tax, although this would also mean losing a significant market segment.
Medicare Part D Spending
Approximately 5.3 million Medicare beneficiaries used these drugs between Nov. 1, 2023, and Oct. 1, 2024, according to CMS. The 15 selected drugs accounted for $41 billion, or 14% of total Medicare Part D spending. Including the first 10 drugs negotiated by Medicare, they represent a third of all Part D spending.
Last year, Medicare successfully negotiated lower prices for the 10 most expensive drugs, such as Eliquis, a blood thinner; Imbruvica, a blood cancer treatment; and NovoLog, a diabetes medication. The new prices for these drugs will be effective in 2026.
The inclusion of Ozempic this year is noteworthy due to the potential budget implications for Medicare beneficiaries, Part D plans, and taxpayers, according to a health policy professor at Vanderbilt University. The drug industry continues to vehemently oppose the program through lawsuits, although so far without success.
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