WASHINGTON (AP) — Popular weight-loss drugs like Ozempic and Wegovy have been added to Medicare’s list of drugs negotiated directly between the government and drugmakers, the Biden administration said Friday.
The price negotiations for the additional 15 drugs selected are being conducted by the new Trump administration and will save taxpayers almost billions of dollars.
In addition to Ozempic and Wegovy, other medications include Trelegy Ellipta, used to treat asthma; Otezla, a drug for psoriatic arthritis; and several that treat various forms of cancer.
The list is a first step in negotiations and given the timing, the details and final pricing will be left to the administration of President-elect Donald Trump.
“For some people, this is a big deal,” U.S. Health and Human Services Secretary Xavier Becerra said in a phone call with reporters on Thursday. “Some people need to skip a dose in their prescription to make a prescription last longer.”
So in total there are 25 drugs with lower prices. These 25 drugs account for a third of Medicare spending on prescriptions, Becerra said.
The savings come from a new law that allows Medicare to haggle over the price it pays for the most popular and exorbitant prescription drug prescriptions filled by older Americans. Such transactions were legally prohibited for Medicare for years. The law passed by Democrats and signed by President Joe Biden was opposed by Republicans at the time, but it is unclear whether they have an interest in repealing or weakening the law now.
Although pharmaceutical companies sued over the negotiations, they took part in the talks with the federal government. Pharmaceutical executives said on earnings calls last year that they did not expect the new Medicare drug prices to affect their bottom line.
Late last year, the Centers for Medicare and Medicaid Services announced that it had reached pricing agreements with companies for 10 drugs in the first round of negotiations. Under the new agreements, list prices for 30-day supplies of popular drugs used by millions of Medicare patients were reduced by hundreds – in some cases, thousands – of dollars. These included the popular blood thinners Xarelto and Eliquis as well as the diabetes drugs Jardiance and Januvia.
The savings from the new list prices for these drugs were expected to generate about $6 billion for taxpayers and $1.5 billion for Medicare enrollees.
The negotiated prices for the drugs will not come into force until 2026. But some Medicare enrollees are expected to get some relief from drug prices this year under a new rule that caps annual out-of-pocket costs for prescription drugs at $2,000.
According to the law, additional drugs will be included in the negotiation process in the coming years.
Ozempic and Wegovy are manufactured by Novo Nordisk, which is based in Denmark and has its U.S. headquarters in Plainsboro, New Jersey.
