Popular weight loss and diabetes drugs like Ozempic and Wegovy have been added to Medicare’s list of medications that will be negotiated directly between the government and drug manufacturers, the Biden administration said Friday.
The price negotiations for the additional 15 drugs selected will be handled by the incoming Trump administration and, if deals are reached, almost assure billions of dollars in savings for taxpayers.
Besides Ozempic and Wegovy, some of the other medications include Trelegy Ellipta, which treats asthma; Otezla, a psoriatic arthritis drug; and several that treat different forms of cancer.
The list is a first step in negotiations and, given the timing, the details and final pricing will be left to President-elect Donald Trump’s administration.
“For some people this is a big deal,” U.S. Health and Human Services Secretary Xavier Becerra said in a call with reporters on Thursday. “Some folks have to skip a dose in their prescription so they can make a prescription last longer.”
That brings the total to 25 drugs that will have lower price tags for Medicare enrollees.
Together, those 25 drugs account for a third of Medicare spending on prescriptions, Becerra said. Ozempic and Wegovy, in particular, have been scrutinized for their high out-of-pocket costs.
Medicare enrollees, however, still won’t be able to access the drugs to treat obesity under a federal law that prohibits the program from paying for weight loss treatments. Right now, Medicare will only cover Ozempic and Wegovy when used to treat diabetes or lower blood sugar. A rule the Democratic Biden administration proposed — and the incoming Republican Trump administration will decide whether to implement — would cover the popular anti-obesity medications.
The savings on the 25 drugs stem from a new law that allows Medicare to haggle over the price it pays on the most popular and expensive prescription drug scripts filled by older Americans. For years, Medicare had been legally prohibited from such dealmaking. The law, passed by Democrats and signed into law by President Joe Biden, was opposed by Republicans at the time, but it’s unclear if they have an interest in trying to repeal or weaken the law now.
Drug companies have sued over the negotiations and remain opposed to the program. On Friday, the top pharmaceutical lobby called on the incoming administration and Congress to “fix” the law.
“In rushing out this list in their final days, the Biden administration once again fails to address the true challenges facing seniors and Medicare,” Stephen Ubl, the president and CEO of Pharmaceutical Research and Manufacturers of America, said in a statement.
Late last year, the Centers for Medicare & Medicaid Services announced it had reached pricing deals with companies for 10 drugs in the inaugural round of negotiations. Under the new deals, list prices were reduced by hundreds — in some cases, thousands — of dollars for 30-day supplies of popular drugs used by millions of people on Medicare. They included popular blood thinners Xarelto and Eliquis and diabetes drugs Jardiance and Januvia. Drug company executives told investors during earnings calls that they did not expect the negotiations to impact their bottom line.
The AARP, one of the most powerful health care interest groups in Washington, said that it would fight any efforts to weaken the law in the GOP-controlled Congress.
“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,” AARP Executive Vice President Nancy LeaMond said in a statement.
The savings from the new list prices for those drugs were expected to generate about $6 billion for taxpayers and $1.5 billion for Medicare enrollees.
Negotiated prices for the drugs don’t kick in until 2026. But some Medicare enrollees should see relief from drug prices in a new rule this year that caps annual out-of-pocket costs on prescription drugs to $2,000.
Under the law, more drugs will be added to the negotiation process in coming years.
The Centers for Medicare & Medicaid Services says the 15 drugs are Ozempic, Rybelsus and Wegovy; Trelegy Ellipta; Xtandi; Pomalyst; Ibrance; Ofev; Linzess; Calquence; Austedo and Austedo XR; Breo Ellipta; Tradjenta; Xifaxan; Vraylar; Janumet and Janumet XR; and Otezla.
Ozempic and Wegovy are made by Novo Nordisk, which is based in Denmark and has U.S. headquarters Plainsboro, New Jersey.
More on Medicare:
- 3 big changes coming to Medicare in 2025. Here’s what they’ll mean for you
- What Medicare beneficiaries need to know about generic medications
- Medicare has a new pilot program to help people with dementia. Here’s how it works
- If you are denied coverage by Medicare, you have the right to appeal the decision. Here’s how
