Next Round of Medicare Drug Price Negotiations to Include Semaglutide

The second phase of the Inflation Reduction Act (IRA) is being realized as semaglutide becomes 1 of 15 medications that will enter price negotiations to make them more affordable for patients on Medicare.¹ Semaglutide is the generic name of the popular type 2 diabetes and weight loss medications Ozempic, Wegovy, and Rybelsus.

The other medications included in the negotiations are varied, with agents for chronic obstructive pulmonary disease, prostate cancer, and breast cancer among the list of included drugs. The price negotiations for these medications will not take effect until 2027, though it is unclear if any aspect of the process will change under the Trump administration. Patients using Medicare can look forward to these drugs entering price negotiation:

• Semaglutide (Ozempic, Wegovy, Rybelsus)
• Fluticasone/umeclidinium/vilanterol (Trelegy Ellipta)
• Enzalutamide (Xtandi)
• Pomalidomide (Pomalyst)
• Palbociclib (Ibrance)
• Nintedanib (Ofev)
• Linaclotide (Linzess)
• Acalabrutinib (Calquence)
• Deutetrabenazine (Austedo, Austedo XR)
• Fluticasone/Furoate/Vilanterol (Breo Ellipta)
• Linagliptin (Tradjenta)
• Rifaximin (Xifaxan)
• Cariprazine (Vraylar)
• Sitagliptin and Metformin HCI (Janumet, Janumet XR)
• Apremilast (Otezla)

Type 2 diabetes, chronic obstructive pulmonary disease, chronic lung disease, irritable bowel syndrome, plaque psoriasis, breast cancer, prostate cancer, involuntary movements, blood cancer, schizophrenia, and chronic constipation are the conditions most commonly treated by the medications currently undergoing price negotiations.

Price negotiations for Medicare will commence with a list of 15 new drugs | Image credit: Stillfx - stock.adobe.com

Approximately 36% of all Medicare Part D prescription drug costs come from this list of medications combined with the drugs whose prices were negotiated last year. The Biden administration estimates that the first wave of price negotiations will save those on Medicare approximately $1.5 billion and net approximately $6 billion in savings for the Medicare program.

The pharmaceutical industry has been less enthusiastic about the prospect of price negotiations, with multiple lawsuits filed by PhRMA, Merck, and Bristol Myers Squibb to halt the price negotiation portion of the IRA.² The US Chamber of Commerce had also filed a motion to block the program but was dismissed by the Department of Justice.

According to statements released on January 17,¹ Stephen Ubl, the CEO of PhRMA, said that the negotiations were dangerous for Americans who wanted innovative treatments. Novo Nordisk has also expressed concerns over how the law is being implemented, specifically with the combination of all semaglutide products for price negotiation purposes.

The program has been received more positively by those outside of the pharmaceutical industry, but experts still stress that pharmaceutical companies require the profits on medications to continue research and clinicians should be included in these negotiations to make sure that other treatments that work better for individual patients are still accessible regardless of the cost of the medications included in price negotiations.² AARP has come out in support of the price negotiations, noting that pharmaceutical companies have increased their profits at the expense of seniors not being able to afford life-saving medications.¹

Affording drugs is a major challenge for those on Medicare, with 10% of those 65 years and older and 20% of those younger than 65 years having issues affording their medications, making the drug negotiations vital for these subgroups. This second round of price negotiations will be the last to only include Medicare Part D drugs, with price negotiations for next year (which would take effect in 2028) set to add specialized medications from Medicare Part B.

Drugmakers will have until February 28 to decide whether to participate in the price negotiation program, with the threat of a 95% tax of its medication sales or the removal of their medication from Medicare and Medicaid markets if they do not participate in negotiations. The medications will then undergo price negotiations with the federal government.

References

1. Constantino AK. Ozempic is in the next round of Medicare drug price negotiations. See the full list of 15 medications. CNBC. January 17, 2025. Accessed January 17, 2025. https://www.cnbc.com/2025/01/17/medicare-drug-price-negotiations-list-includes-ozempic.html
2. Mattina C. CMS releases list of 10 drugs subject to price negotiation under IRA. AJMC. August 29, 2023. Accessed January 17, 2025. https://www.ajmc.com/view/cms-releases-list-of-10-drugs-subject-to-price-negotiation-under-ira