Ozempic box and contents on a table in Dudley, North Tyneside, England, October 31, 2023.
George Frey | Reuters
The Biden administration on Friday announced the next 15 prescription drugs that will be subject to price negotiations between manufacturers and Medicare, a breakthrough aimed at making expensive drugs more affordable for seniors. The second stage of the process begins.
At the top of the list are novo nordisk‘s blockbuster diabetes injection Ozempic, weight loss injection Wigovy, and diabetes drug Libersus are among the products targeted for consultation, as they all share the same active ingredient, semaglutide. It is considered as one. These treatments have fueled the rise of a rampant obesity market, but have been difficult for patients to access due to cost, insurance coverage, and supply constraints.
Agreed prices for second-wave medicines are scheduled to take effect in 2027, but it remains to be seen whether President-elect Donald Trump may seek to change or roll back some of the law’s provisions when he takes office next week. It’s opaque.
The 15 medicines that will be the subject of the first consultation this year are:
Ozempic, Wegovy, and Rybelsus (semaglutide), manufactured by Novo Nordisk, are used for type 2 diabetes, weight management, and cardiovascular health. Trelegy Ellipta, manufactured by Novo Nordisk GSKis an inhaler used for chronic obstructive pulmonary disease and asthma. Manufactured by Xtandi. pfizermade by Pomalyst, which is used to treat prostate cancer in men bristol myers squibis used to treat a blood cancer called multiple myeloma and a cancer that occurs in people with HIVI. Brance, manufactured by Pfizer, is used to treat certain types of breast cancer. Ofev, manufactured by Boehringer Ingelheim, is used to treat chronic lung disease in adults. made by AbbVie and ironwood pharmaceuticalsused to treat irritable bowel syndrome and chronic constipation. AstraZenecaused to treat certain types of blood cancer. Manufactured by Austedo, Austedo XR. Teva Pharmaceuticalsused to treat involuntary movements caused by tardive dyskinesia or Huntington’s disease. Breo Ellipta by GSK and Theravanceis an inhaler used to treat chronic obstructive pulmonary disease. Tragenta manufactured by Boehringer Ingelheim, Eli LillyUsed in the management of type 2 diabetes. Xifaxan, made by Salix Pharmaceuticals, is used to treat diarrhea caused by travel or irritable bowel syndrome. Vraylar, made by AbbVie, is used to treat schizophrenia, bipolar I disorder, and major depressive disorder. Made by Janumet, Janumet XR, Merckis made by Otezla, which is used in the management of type 2 diabetes amgenUsed to treat plaque psoriasis, psoriatic arthritis, and oral ulcers.
President Joe Biden’s Inflation Control Act gives Medicare the power to directly offset drug prices with manufacturers for the first time in the federal program’s nearly 60-year history. Some congressional Democrats and consumer advocacy groups have long pushed for this change, as many seniors across the country struggle to pay for care.
According to the report, approximately 5.3 million Medicare Part D enrollees will be eligible for a variety of medical conditions, including asthma, cancer, and type 2 diabetes, during the second consultation period from November 1, 2023 to October 31, 2024. He said he used 15 different drugs to treat his symptoms. The announcement was made by the Department of Health and Human Services on Friday. This group of drugs accounted for approximately $41 billion, or 14%, of total Part D prescription drugs during the same period, the statement added.
Combined with the 10 drugs selected in the first negotiation cycle, the 25 products represent 36% of all Medicare Part D prescription drug costs during that period, according to the release.
These drugs have been on the market without generic competitors for at least seven years, or 11 years in the case of biological products such as vaccines.
Medicare has already negotiated the first 10 drugs selected for the program, and new prices are expected to go into effect next year. The Biden administration said in August that these negotiated prices would save Medicare enrollees about $1.5 billion in out-of-pocket costs in 2026 alone. The government also projects that this price will result in net savings for the Medicare program of approximately $6 billion in 2026, or 22% of the total.
The negotiation program has also faced a number of legal challenges from the pharmaceutical industry, which have so far been unsuccessful. The pharmaceutical industry views this process as a threat to sales, profits, and drug discovery innovation.
Stephen Ubl, CEO of PhRMA, the industry’s largest lobbying group, said in a statement Friday that the negotiations “required an innovative treatment and created unnecessary and costly bureaucracy. It’s a danger to millions of Americans.”
“By rushing this list out at the last minute, the Biden administration is once again failing to address the real challenges facing seniors and Medicare,” he added, adding that price negotiations are no different from other They argued that the drug unfairly targets drugs that are released in pill form much earlier than other types of drugs. medicine. PhRMA is eager to work with the Trump administration and Congress to “fix” its “pill punishment,” Ubl said.
Novo Nordisk said in a statement Friday that it opposes the negotiations and has “serious concerns” about how the Biden administration is implementing the law. The Danish pharmaceutical company specifically criticized the decision to combine several products that “individually do not meet the requirements of the legislation”, noting that Ozempic, Libersus and Wigovy are listed as a single product.
Novo Nordisk said its lawsuit against the program is still pending and that it will work with the Trump administration to provide “meaningful solutions for patients.”
Medicare covers about 66 million people in the U.S., and 50.5 million patients are currently enrolled in Part D plans, according to the health care policy research institute KFF.
A government official told reporters last year that nearly 10% of Medicare enrollees over age 65 and 20% of those under 65 have difficulty purchasing medicines.
“Last year, we proved that negotiating drug prices down can be effective, and now we plan to build on that record by negotiating lower prices for 15 additional critical medications for seniors,” said HHS Secretary Xavier. Becerra said in the release. “Today’s announcement is extremely important. The Inflation Control Act will lower rates for Medicare enrollees. We will continue negotiations.”
Patient advocacy groups such as the nonprofit AARP applauded Friday’s announcement.
“For too long, Big Pharma has sacrificed American lives by setting exorbitant prices that seniors cannot afford,” Nancy Leamond, AARP’s chief advocacy and engagement officer, said in a statement. “They have inflated profits by forcing people to skip prescriptions.” “Medicare’s first round of drug price negotiations made clear that this process will lower prices on these important products, resulting in billions of dollars in savings for Medicare and its beneficiaries.”
How much does Medicare spend on drugs?
Of the 10 drugs on the list, Medicare Part D spent the most on Ozempic, Libersus and Wegoby, at $14.43 billion, according to Friday’s CMS fact sheet. Nearly 2.3 million enrollees used these drugs during the CMS period.
The plan also spent about $5.14 billion on Trelegy Ellipta, which had 1.3 million subscribers. According to the fact sheet, Custandi cost Medicare Part D $3.16 billion even though only 35,000 people enrolled were using the drug.
Spending on Pomalyst was $2.07 billion and only 14,000 people enrolled using the drug. All other drugs listed cost the program less than $2 billion.
Medicare Part D spent the least on Otezla at $995 million, with 31,000 enrollees using the drug, according to the fact sheet.
What will happen to Medicare price negotiations in the future?
Pharmaceutical companies have until February 28 to decide whether to participate in the program. If drug companies do not negotiate, they must pay excise taxes of up to 95% of drug sales in the United States or withdraw all products from the Medicare and Medicaid markets.
Participants will engage in a lengthy negotiation process with Medicare that involves going back and forth on price offers over many months. The federal program uses sales volume data, the level of federal financial support for drug development, data on pending and approved patent applications and exclusivity rights, and other information to determine the initial offer for each drug.
After the second round, Medicare will be able to negotiate prices for 15 more drugs scheduled to go into effect in 2028. That number will increase to 20 drug price negotiations per year from 2029.
The government plans to select only Medicare Part D drugs in the first two rounds of negotiations. In 2028, the company plans to add more specialty drugs covered by Medicare Part B, which are typically administered by doctors.
But drug companies will have more opportunities to negotiate with Medicare under the second round of final pricing guidance released last year. The first option negotiation meeting will be held after Medicare makes initial price offers for 15 drugs, which must be submitted by June 1.
