A box of Ozempic and its contents lie on a table in Dudley, North Tyneside, UK, October 31, 2023.
George Frey | Reuters
On Friday, the Biden administration revealed the so-called another 15 prescription drugs it will depend on the price layouts between manufacturers and Medicare, starting phase two a groundbreaking process which aims to increase the availability of expensive medicines for seniors.
They are at the top of the list New Nordiskblockbuster Ozempic diabetes shot, Wegovy weight loss shot and Rybelsus diabetes pill, which are considered as one product in talks because they all have the same active ingredient: semaglutide. These therapies contributed to the red-hot obesity treatment market and were difficult to access for patients due to cost, insurance coverage and supply constraints.
The agreed prices for the second wave of drugs are scheduled to take effect in 2027. However, it is unclear whether President-elect Donald Trump could try to change or limit some provisions of the law when he takes office next week.
Here are the 15 drugs in early talks this year:
- Ozempic, Wegovy, Rybelsus, (semaglutide) manufactured by Novo Nordisk, it is used to treat type 2 diabetes, weight management and cardiovascular health
- Trelegy Ellipta, made by GSKis an inhaler used to treat chronic obstructive pulmonary disease and asthma
- Xtandi made by Pfizerit is used to treat prostate cancer in men
- Slow down made by Bristol Myers Squibbit is used to treat a blood cancer called multiple myeloma and a cancer that develops in people infected with HIV
- Ibrance, produced by Pfizer, is used to treat certain breast cancers
- Ofev, produced by Boehringer Ingelheim is used to treat chronic lung diseases in adults.
- Linzess, made by AbbVie AND Ironwood Pharmaceutical Companyis used to treat irritable bowel syndrome and chronic constipation
- Kalkencja, made by AstraZenecait is used to treat certain types of blood cancers
- Austedo, Austedo XR, made by Teva pharmaceutical companyit is used to treat involuntary movements caused by tardive dyskinesia or Huntington's disease
- Breo Ellipta, made by GSK i Advanceis an inhaler used to treat chronic obstructive pulmonary disease
- tradition, made by Boehringer Ingelheim i Eli Lillyit is used to treat type 2 diabetes
- Xifaxan, manufactured by Salix Pharmaceuticals, it is used to treat diarrhea caused by travel or irritable bowel syndrome
- Vrays, manufactured by AbbVie, is used to treat schizophrenia, bipolar I disorder and major depression
- Janumet, Janumet XR, made by Merckit is used to treat type 2 diabetes
- Otezla, made by Amgenit is used to treat plaque psoriasis, psoriatic arthritis and mouth ulcers
President Joe Biden's Inflation Reduction Act gave Medicare the ability to directly agree drug prices with manufacturers for the first time in the federal program's nearly 60-year history. Some Democrats in Congress and consumer advocates have long called for the change as many seniors across the country struggle to afford care.
According to the data, approximately 5.3 million people covered by Medicare Part D used 15 drugs in the second round of interviews to treat a variety of conditions, such as asthma, cancer and type 2 diabetes, between November 1, 2023 and October 31, 2024. The release Department of Health and Human Services on Friday. This class of drugs accounted for approximately $41 billion, or 14% of total Part D prescription drug costs, during this period, the release added.
Combined with the 10 drugs selected for the first negotiation cycle, the 25 products account for 36% of all Medicare Part D prescription drug costs during this period, the release said.
These drugs have been on the market for at least seven years without generic competitors, or 11 years for biological products such as vaccines.
Medicare has already completed negotiations on the first 10 drugs selected for the program, and the new prices are expected to go into effect next year. In August, the Biden administration said it expected the negotiated prices to save people enrolled in Medicare $1.5 billion in out-of-pocket costs in 2026 alone. The government also expects the prices to lead to net savings of about $6 billion in the Medicare program in 2026or a total of 22% net savings.
The negotiation program has also been met with an avalanche of – so far unsuccessful – legal challenges from the pharmaceutical industry, which perceives this process as a threat to the growth of its revenues, profits and drug innovation.
Medicare covers approximately 66 million people in the U.S. and 50.5 million According to research organization KFF, patients are currently enrolled in Part D plans.
Nearly 10% of Medicare enrollees 65 and older and 20% of those under 65 report difficulty accessing medications, a senior administration official told reporters last year.
“Last year we proved that negotiating for lower drug prices works. We now plan to build on this result by negotiating lower prices for 15 additional important medications for seniors,” HHS Secretary Xavier Becerra said in a statement. “Today's announcement is critical – the Inflation Reduction Act lowers prices for people on Medicare. “HHS will continue to negotiate in the best interests of Medicare beneficiaries so that they have access to innovative, life-saving treatments at lower costs.”
Patient advocacy groups like the nonprofit AARP welcomed the announcement Friday.
“For too long, big pharmaceutical companies have depressed their profits, set outrageous prices at the expense of American lives, and forced seniors to forgo drugs they cannot afford,” AARP said in a statement. “The first round of Medicare drug price negotiations has made clear that this process will lower prices for these important products and create billions of dollars in savings for Medicare and its beneficiaries.”
How much did Medicare spend on drugs?
Of the 10 drugs listed, Medicare Part D spent the most on Ozempic, Rybelsus and Wegovy at $14.43 billion, according to CMS. information sheet on Friday. Nearly 2.3 million enrollees used these medications during the CMS study period.
The plan also spent about $5.14 billion on Trelegy Ellipta, which was used by 1.3 million enrollees. Xtandi cost Medicare Part D $3.16 billion, according to the fact sheet, even though only 35,000 enrollees used the drug.
Spending on Pomalyst was $2.07 billion, and only 14,000 registered people were using the drug. All other drugs listed cost the program less than $2 billion.
The fact sheet shows that Medicare Part D spent the least on Otezla at $995 million, and 31,000 enrollees used the drug.
What's next in Medicare pricing talks?
Drugmakers will have until February 28 to decide whether to participate in the program. If a drugmaker refuses to negotiate, it will have to either pay an excise tax of up to 95% of U.S. sales of its drugs or withdraw all of its products from the Medicare and Medicaid markets.
Those who participate will engage in a lengthy negotiation process that includes months of back-to-back price offers with Medicare. The federal program determines its initial bid for each drug using, among other things, data on sales volume, the level of federal financial support for drug development, and data on pending or approved patent applications and exclusivity.
After the second round is completed, Medicare can negotiate prices for an additional 15 drugs, which will go into effect in 2028. This number will increase to 20 negotiated drugs per year, starting in 2029.
The government will select Medicare Part D drugs only for the first two rounds of negotiations. In 2028, it will add more specialty drugs covered by Medicare Part B that are typically administered by doctors.
But drugmakers will have more power to negotiate with Medicare, based on final guidelines released last year for the second round of pricing talks. The first optional negotiation meetings will take place after Medicare submits preliminary price offers for 15 drugs that must be submitted by June 1.