Washington — Popular weight loss and diabetes drugs like Ozempic and Wegovy have been added to the list of Medicare drugs that will be negotiated directly between the government and drug manufacturers, the Biden administration said Friday.
Pricing negotiations for an additional 15 selected drugs will be handled by the incoming Trump administration, and if a deal goes through, billions of dollars in savings for taxpayers are all but guaranteed.
In addition to Ozempic and Wegovy, Trelegy Ellipta, which treats asthma; Otezla, a treatment for psoriatic arthritis; And there are several products that treat various forms of cancer.
The list is the first step in negotiations, and given the timing, details and final pricing will be left to President-elect Donald Trump’s administration.
“For some people, this is a big problem,” U.S. Health and Human Services Secretary Xavier Becerra said on a call with reporters Thursday. “Some people need to skip doses in their prescription to make it last longer.”
This brings the total number of drugs that will offer lower price tags to Medicare enrollees to 25.
Becerra said these 25 drugs account for one-third of Medicare prescription drug spending. Ozempic and Wegovy in particular have come under scrutiny due to their high out-of-pocket costs.
However, Medicare enrollees do not have access to obesity medications due to a federal law that prohibits the program from paying for weight loss treatment. Currently, Medicare only covers Ozempic and Wegovy, which are used to treat diabetes or lower blood sugar. The rules proposed by the Democratic Biden administration (and which the incoming Republican Trump administration will decide whether to implement) include popular anti-obesity drugs.
The savings on 25 drugs come from a new law that allows Medicare to bargain on the prices it pays for the most popular and expensive prescription drugs older Americans fill. For years, Medicare has legally prohibited such transactions. The law, passed by Democrats and signed by President Joe Biden, was opposed by Republicans at the time, but it is unclear whether they are now interested in repealing or weakening the law.
Drug companies have filed lawsuits over the negotiations and remain opposed to the program. On Friday, the top pharmaceutical lobby urged the incoming administration and Congress to “fix” the law.
“The real challenges facing seniors and Medicare as the Biden administration rushes through this list in its final days,” Stephen Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America, said in a statement. “Once again, we were unable to resolve the issue,” he said.
At the end of last year, the Medicare Centers for & Medicaid Services announced that it has reached pricing agreements with the companies for 10 drugs in the first round of negotiations. Under the new deal, the list price for a 30-day supply of popular drugs used by millions of people on Medicare has been cut by hundreds, and in some cases, thousands of dollars. These included popular blood thinners Xarelto and Eliquis, and diabetes drugs Jardiance and Januvia. Drug company executives told investors on the earnings call that they did not expect the negotiations to impact earnings.
AARP, one of the most powerful health care interests in Washington, said it would fight any efforts to weaken the law in the Republican-controlled Congress.
“For too long, big pharmaceutical companies have increased their profits by charging exorbitant prices and forcing seniors to skip prescriptions they can’t afford, at the expense of American lives,” Nancy LeaMond, AARP vice president, said in a statement. said.
The new list prices for the drugs were expected to generate approximately $6 billion in savings for taxpayers and $1.5 billion for Medicare enrollees.
Negotiated prices for drugs will not take effect until 2026. But some Medicare enrollees could see their drug prices ease this year under new rules capping annual out-of-pocket costs for prescription drugs at $2,000.
The law will likely add more drugs to the negotiating process over the next few years.
Medicare Center & Medicaid Services said the 15 drugs were Ozempic, Rybelsus and Wegovy. Trelegy Ellipta; Xtandi; pomalist; vigor; Ofev; Linzes; Calquence; Austedo and Austedo XR; Breo Ellipta; Trajenta; Sipaxan; Brailer; Janumet and Janumet XR; And Otezla.
Ozempic and Wegovy are manufactured by Novo Nordisk, headquartered in Denmark with U.S. headquarters in Plainsboro, New Jersey.
