Medicare to Negotiate Lower Prices for Ozempic, Wegovy and 13 Other Drugs
Lower Medicare costs for Ozempic and other key drugs may start in 2027—here’s what to know
Changes may be on the horizon regarding the cost of diabetes and weight loss drug titans like Ozempic and Wegovy. The Biden administration has announced the next round of prescription drugs selected for Medicare price negotiations. Here’s everything you need to know.
The 15 new drugs selected for Medicare price negotiations
The list includes 15 medications covered under Medicare Part D, and is the first step in a negotiation process between Medicare and drug manufacturers which will occur throughout the year. Any new prices resulting from the negotiation will take effect in 2027.
The selected drug list for the second cycle of negotiations is:
- Ozempic and Rybelsus (for Type 2 diabetes); Wegovy (for weight management)
- Trelegy Ellipta (for asthma and COPD)
- Xtandi (for prostate cancer)
- Pomalyst (for multiple myeloma cancer)
- Ibrance (for HR+ and HER2- metastatic breast cancer)
- Ofev (for lung disease)
- Linzess (for IBS and constipation)
- Calquence (for chronic lymphocytic leukemia)
- Austedo; Austedo XR (for Huntington’s disease)
- Breo Ellipta (for asthma)
- Tradjenta (for Type 2 diabetes)
- Xifaxan (for IBS with diarrhea and hepatic encephalopathy, a condition that affects the brain in people who have liver disease)
- Vraylar (for major depressive disorder)
- Janumet; Janumet XR (for Type 2 diabetes)
- Otezla (for plaque psoriasis and psoriatic arthritis)
What happens next?
In accordance with the final guidance for the second cycle of the Drug Price Negotiation Program, drug makers included in the updated list will have until February 28, 2025 to decide if they will participate in negotiations, according to the Centers for Medicare & Medicaid Services (CMS).
During negotiations, the CMS will consider the selected drug’s clinical benefit, the extent to which it addresses unmet medical needs and its impact on specific populations, including people who rely on Medicare, the agency says. Other considerations include costs associated with research and development as well as production and distribution for selected drugs.
How Medicare’s drug negotiation program is lowering costs
Medicare’s ability to work out lower drug prices is due to the Inflation Reduction Act of 2022. In August of 2023, the U.S. Department of Health and Human Services (HHS) announced the 10 drugs covered under Medicare Part D selected for the first cycle of negotiations.
After the first cycle of negotiations, Medicare and participating drug manufacturers reached an agreement on new, lower prices for all 10 drugs. Those prices will become effective starting January 1, 2026. The CMS estimates that if the new prices had been in effect in 2023, this would have saved an estimated $6 billion in net covered prescription drug costs, or approximately 22 percent across the 10 selected drugs.
The new prices range from 38 to 79 percent discounts off of list prices. When they are officially implemented in 2026, people with Medicare prescription drug coverage are expected to see total estimated savings of $1.5 billion in personal out-of-pocket costs.
“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,” said HHS Secretary Xavier Becerra. “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.”
