The Biden administration said Friday it is targeting 15 drugs in the second-ever round of price negotiations under Medicare, with blockbuster drugs Ozempic and Wegovy topping the list.
The list of drugs includes treatments for cancer, type 2 diabetes and asthma. Roughly 5.3 million people in Medicare’s Part D prescription benefit use the drugs.
Most notable is the inclusion of Ozempic, a diabetes drug from Danish manufacturer Novo Nordisk that’s used by celebrities and others to lose weight. The drug’s high demand and multiple benefits sparked a debate about cost.
Weight-loss injection Wegovy and diabetes pill Rybelsus, also by Novo Nordisk, joined Ozempic on the list of drugs subject to negotiation in 2025. New prices would take effect in 2027.
Mr. Biden’s push to negotiate down drug prices through Medicare was included in signature 2022 legislation known as the Inflation Reduction Act. Democrats who fought for decades to wield government power against drug prices hailed it as a milestone.
This is the second round of price negotiations. The prices negotiated in the first round — 10 drugs in total — will take effect in 2026, though the government adds up to 15 more drugs each year.
The government says talks last year resulted in price cuts from 38% to 79% among targeted drugs.
“The 25 drugs that Medicare negotiates lower prices on represent a third of the Medicare Part D spending. This is outstanding progress in just two short years,” said Rep. Richard Neal of Massachusetts, the top-ranking Democrat on the House Ways and Means Committee.
The pharmaceutical industry hates the program and sued to try and stop it.
They say the process is akin to extortion — not negotiation — because drugmakers have no choice but to accept price talks or withdraw from the robust Medicare program that enrolls over 60 million seniors.
The pharmaceutical lobby took exception this year to the inclusion of innovative drugs in pill form. They pointed to a provision in the law that allows pills to become subject to price talks earlier than other drug types.
“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,” said Stephen J. Ubl, president and CEO of Pharmaceutical Research and Manufacturers of America.
The industry and Republican allies say Mr. Biden’s program amounts to socialist-style price setting and will lead to fewer cures coming to market. Donald Trump and GOP majorities might find ways to tinker with the program, although the tough-talking president-elect has in the past favored negotiating down drug prices.
“We are eager to work with the new administration and Congress to fix the pill penalty and ensure Americans are not harmed by other flaws in the IRA,” Mr. Ubl said.
Novo Nordisk said it remained opposed to “government price-setting” and has concerns about how the administration selected the drugs, including the aggregation of multiple products “that individually would not meet the requirements of the statute.”
It said the price-setting process could harm patient access to medicines and innovation.
“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 company said.
Promoters of Mr. Biden’s program say it will reduce seniors’ out-of-pocket costs and could spill over into negotiations between employer plans and drugmakers, though it is unclear if that will happen.
The list price for Ozempic is nearly $1,000 for a monthly supply, while Wegovy’s list price is roughly $1,350.
Whether enrollees see savings directly could depend on the structure of their coverage, such as whether they must pay coinsurance out-of-pocket.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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