Ozempic, Wegovy among drugs selected for Medicare's price negotiations
Weight loss drugs Ozempic and Wegovy have been added to the list of medications Medicare will be able to negotiate directly with drug manufacturers, potentially leading to savings for consumers.
The Biden administration announced Friday that Ozempic, Wegovy and 13 additional drugs will now be covered under Medicare Part-D for price negotiations, the next round of negotiations under the Inflation Reduction Act passed by President Joe Biden in 2022.
The negotiations will occur this year and any negotiated prices will become effective in 2027, according to a Centers for Medicare & Medicaid Services fact sheet on the announcement.
"For the time period between November 1, 2023, and October 31, 2024, which is the time period used to determine which drugs were eligible for negotiation for this second cycle, about 5.3 million people with Medicare Part D coverage used these drugs to treat a variety of conditions, such as cancer, type 2 diabetes, and asthma," the CMS fact sheet states.
In addition to Ozempic and Wegovy, other prescription medications selected for negotiations include Calquence, Trelegy Ellipta, Rybelsus, Linzess and Otezla.
"These selected drugs accounted for about $41 billion in total gross covered prescription drug costs under Medicare Part D, or about 14%, during that time period," Biden administration officials said on a call Thursday with reporters.
The newly-announced drugs build on 10 previously announced and negotiated drugs.
The results of those negotiations were announced in August. The new negotiated prices will go into effect in January 2026 and are expected to save Medicare recipients a total of $1.5 billion in out of pocket expenses, according to officials.
Officials told reporters that the 15 drugs announced Friday, plus the previous 10, represent about one-third of Medicare Part D spending on prescription drugs.
Weight loss medications like Ozempic and Wegovy are currently only covered under Medicare for specific uses like diabetes and heart disease, but not obesity.
Without insurance coverage, the cost of medications like Ozempic and Wegovy can run more than $1,000 a month.
Ozempic is approved by the U.S. Food and Drug Administration to treat Type 2 diabetes, but some doctors prescribe the medication "off-label" for weight loss, as is permissible by the FDA.
Wegovy, a medication that contains the same main ingredient as Ozempic, semaglutide, is FDA-approved for weight loss in people with obesity or who are overweight with additional risks for cardiovascular disease.
Officials were asked how negotiations would work if those types of medications were included, given current limitations on uses.
"As a general matter of policy, the law directs CMS to use data that is aggregated across different dosage, forms and strengths of a drug in the negotiation process. And so practically, that means that when a drug is selected for negotiation, all dosage forms and strengths of that drug are included in the negotiation, even if they are sold in different formulations or under different brand name," officials said on Thursday's call.
The Biden administration has proposed a rule to include weight loss drugs under Medicare, though the finalization of that rule will land with the Trump White House.
The Trump administration does not have much wiggle room on drug negotiations since it is part of the Inflation Reduction Act, and any changes would need to go through Congress. But the administration could be more lenient with the drug companies in the process.
"For the most part, all of the key milestones are statutory deadlines. So the statute requires, among other things, that the negotiated prices be announced by a specific date next fall," officials said.
Drug companies with a selected drug will have until Feb. 28 to decide if they will participate in negotiations. If they decline to participate in negotiations, they could face tax penalties.
"In negotiating with participating manufacturers, CMS will consider the selected drug's clinical benefit, the extent to which it addresses unmet medical needs, and its impact on specific populations, including people who rely on Medicare, among other considerations, such as costs associated with research and development as well as production and distribution for selected drugs," the CMS fact sheet states.
