Ozempic tops new Medicare price negotiation list
Ozempic/Wegovy is the first drug on HHS's 2025 list of Medicare price negotiations.
As the leaders of the pharmaceutical industry boarded their planes to come home from the JP Morgan Healthcare Conference in San Francisco, the outgoing Biden administration at HHS dropped their farewell gift to the industry - the list of the next 15 drugs to be subject to what the government calls price negotiation and the industry calls price setting under the Inflation Reduction Act.
At the top of that list, unsurprisingly, are Novo Nordisk obesity drugs Ozempic, Rybelsus, and Wegovy, all grouped together as a single drug. Eli Lily's GLP-1 competitor Mounjaro/Zepbound doesn't make the list, but that is because it has not been on the market long enough to be up for consideration.
The list of 15 drugs (up from 10 in 2023) includes four oncology drugs, three drugs targeting diabetes, two focused on COPD, and two drugs for IBS. The list also includes the first psychiatric medicine to be included in price negotiation, Abbvie's Vraylar.
Boehringer Ingelheim, Abbvie, and GlaxoSmithKline each have two drugs on the list. Meanwhile, Johnson & Johnson (who had three drugs on the 2023 list), Eli Lilly, and Novartis all escape unscathed.
Here's the full list of drugs:
- Novo Nordisk's Ozempic/Rybelsus/Wegovy (semaglutide)
- GSK's Trelegy Ellipta (fluticasone/umeclidinium/vilanterol)
- Astellas's Xtandi (enzalutamide)
- BMS's Pomalyst (pomalidomide)
- Pfizer's Ibrance (palbociclib)
- Boehringer Ingelheim's Ofev (nintedanib)
- Abbvie and Ironwood Pharmaceuticals' Linzess (linaclotide)
- AstraZeneca's Calquence (acalabrutinib)
- GSK and Theravance's Breo Ellipta (fluticasone furoate/vilanterol)
- Boehringer Ingelheim's Tradjenta (linagliptin)
- Salix Pharmaceuticals' Xifaxan (rifaximin)
- Abbvie's Vraylar (cariprazine)
- Merck KGaA's Janumet (sitagliptin/metformin)
- Amgen's Otezla (apremilast)
"Last year, we proved that negotiating for lower drug prices works. Now, we plan to build on that record by negotiating for lower prices for 15 additional important drugs for seniors," HHS Secretary Xavier Becerra said in a statement. "Today’s announcement is pivotal – the Inflation Reduction Act is lowering prices for people on Medicare. HHS will continue negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs."
According to HHS's announcement, these drugs were used by 5.3 million Medicare Part D recipients between November 2023 and October 2024 and cost the government $41 billion during that time. The negotiations will begin this year and the negotiated prices will take effect in 2027.
At JP Morgan this week, many pharma leaders discussed their hopes that the incoming administration would correct what they see as the biggest flaw in the IRA - the shorter window time for small molecule drugs vs biologics, dubbed the "pill penalty" by the industry.
"In rushing out this list in their final days, the Biden administration once again fails to address the true challenges facing seniors and Medicare," industry group PhRMA said in a statement. “Over half the medicines selected for price setting by the Biden Administration are being targeted because of the ‘pill penalty’ included in the IRA, which lets the government set the price of medicines that often come in pill form much earlier than other types of medicines. The pill penalty sends a clear message to innovators to stop developing these medicines, even though they may be the most effective, convenient, and lowest cost option for patients. In fact, recent research found that early-stage funding for small molecule drug development has fallen 70% since the IRA was enacted."
Pharma's new PR strategy on drug costs is to focus on the price drivers outside of the industry, like PBMs and 340B abuse. PhRMA recently commissioned an independent study by the Berkeley Research Group with the headline finding that 50% of the money spent on drugs goes to entities that weren't involved in making them.
Whether or not the Trump administration will prove a friend to pharma where the IRA is concerned remains to be seen, but they will have to contend with a public opinion that's largely behind the law. AARP recently released a post-election survey showing that 85% of American adults aged aged 50 and over believe it is very or extremely important for Congress and the administration to protect Medicare’s ability to negotiate lower prescription drug prices.
