Novo Nordisk’s blockbuster GLP-1 medications Ozempic and Wegovy are among the next 15 drugs being targeted by the federal government for price setting negotiations.

In a Jan. 17 press release, the U.S. Centers for Medicare and Medicaid Services (CMS) released its list of drugs covered under Medicare Part D selected for the second round of the program.

The medications include:

• Novo Nordisk’s Ozempic, Rybelsus and Wegovy
• GSK’s Trelegy Ellipta
• Astellas/Pfizer’s Xtandi
• Bristol-Myers Squibb’s Pomalyst
• Pfizer’s Ibrance
• Boehringer Ingelheim’s Ofev
• AbbVie/Ironwood’s Linzess
• AstraZeneca’s Calquence
• Teva’s Austedo and Austedo XR
• GSK’s Breo Ellipta
• Boehringer Ingelheim’s Tradjenta
• Salix’s Xifaxan
• AbbVie’s Vraylar
• Merck’s Janumet and Janumet XR
• Amgen’s Otezla

Under the program’s timeline, drugmakers have until Feb. 28 to decide if they want to participate in talks. CMS said it will announce maximum fair prices for the medications by Nov. 30, 2025. Negotiated prices will roll out Jan. 1, 2027.

According to CMS, about 5.3 million people with Medicare Part D coverage used these medications between November 2023 and October 2024 to treat conditions such as cancer, asthma and Type 2 diabetes.

Altogether, the 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, officials said.

When combined with the total gross covered prescription drug costs under Medicare Part D of the 10 drugs selected for the first cycle of negotiations over that same time period, this represents over a third of total gross covered prescription drug costs under Medicare Part D, CMS said.

‘Life saving treatments at lower costs’

By allowing Medicare to have a say in setting drug prices for the first time in its six-decade history, the government aims to drive down the cost of prescription drugs for older Americans.

The initiative is part of President Joe Biden’s signature Inflation Reduction Act. It allows CMS to directly negotiate with pharmaceutical companies over prices. Participation is voluntary, but companies who choose not to engage face the option of paying excise taxes or terminating their relationship with Medicaid.

In August 2023, the U.S. Department of Health and Human Services announced the first 10 drugs covered under Medicare Part D for the first cycle of negotiations.

After months of talks, the Biden administration said it reached a deal to lower the cost of some of the most commonly used drugs under Medicare by 38%-79% off list prices. The inaugural 10 picked for negotiations included medications for heart disease, diabetes and cancer. The prices go into effect in 2026.

After, the changes expect to save seniors and other Medicare Part D enrollees $1.5 billion in out-of-pocket costs in the first year. Projections also say the adjustments will save Medicare $6 billion in year one.

HHS Secretary Xavier Becerra commented, “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. 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.”

Looking ahead

The Medicare Drug Price Negotiation Program has faced several – and so far unsuccessful – legal challenges from the pharmaceutical industry. The views the mandate as a threat to profits, innovation and revenue growth. 

Novo Nordisk was among the several companies that sued the administration over the program. However, the drug maker with U.S. headquarters in Plainsboro still opted to take part in the inaugural discussions for its diabetes drug NovoLog.

In a statement to NJBIZ, a company spokesperson said, “Novo Nordisk remains opposed to government price setting through the IRA and has significant concerns about how the law is being implemented by this administration, including aggregating multiple products that individually would not meet the requirements of the statute.”

“Even as our IRA lawsuit progresses, we remain committed to working with policymakers to advance solutions to ensure access and affordability for all patients. That is why we are deeply concerned about the price-setting process, which could negatively impact patients’ ability to access their medicines and threatens to stifle future scientific development of life-changing medicines for chronic diseases in which there is a real unmet need,” the company said.

“However, as part of our steadfast commitment to ensure patients have access to our medications, we will work with the incoming administration to deliver meaningful solutions for patients,” the statement concluded.

A better way

According to CMS, close to 2.3 million seniors enrolled in Medicare are using Novo Nordisk’s semaglutide medications branded as Ozempic, Wegovy and Rybelsus.

Between November 2023 and October 2024, the three drugs were the costliest in the program – more than $14 billion, according to a CMS analysis of the highest total gross covered prescription drug costs under Medicare Part D.

The next was GSK’s asthma and chronic obstructive pulmonary disease medication Trelegy Ellipta. Around 1.25 million seniors use that drug and it costs around $5.1 billion, CMS said.

In a statement, Chrissy Buteas, president and CEO of HealthCare Institute of New Jersey, spoke out against “government-imposed price controls on life-saving medicines.”

Trade group HINJ represents the state’s biopharmaceutical and medtech companies.

“There are smart and efficient ways to lower health care costs with immediate savings for patients, but government price-setting is not one of them. These artificial price controls do not consider the extraordinarily expensive and risky efforts – most of which fail after spending billions of dollars – to cure diseases and keep people alive,” she said. “This also does not consider other actors within the supply chain that drive up costs, such as pharmacy benefit managers (PBMs),” she stated.

Buteas went on to say, “This latest round of Inflation Reduction Act price controls will further stifle the innovation necessary to research and discover new treatments for patients.”

She also said, “We remain committed to working with federal and state lawmakers on lowering health care costs for patients without jeopardizing the discovery of new, life-saving treatments and cures or threatening New Jersey jobs or our state’s innovation economy … We will continue working with all stakeholders – including patient groups desperately awaiting the discovery of new treatments and cures – on policies that protect both the patient community and medical innovation.”

Full support

“BioNJ fully supports the statement made by Biotechnology Innovation Organization President and CEO John Crowley regarding this morning’s announcement from the U.S. Department of Health and Human Services on the selection of 15 additional drugs under Medicare Part D for price negotiations. We are increasingly concerned about the impact of the pricing provisions in the Inflation Reduction Act. These provisions are already affecting companies at every stage of the pipeline, particularly those struggling to secure funding for small molecule therapies which inevitably prioritizes certain Patient communities over others who depend on new small molecule therapeutics to treat or cure their medical conditions,” BioNJ and its president and CEO Debbie Hart said in a Jan. 17 statement.

“This means that, beyond the impact on companies whose drugs are targeted in this round, earlier stage companies are being hurt by the therapies that never make it to the bench,” it continued. “And ultimately, the real price is paid by Patients who will never see the innovation they so desperately need.”

Editor’s note: This story was updated at 3:50 p.m. ET on Jan. 17, 2025, to include comments from BioNJ.

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