Medicare Selects 15 Drugs for Second Round of Price Negotiations, Including Popular Weight Loss Medication

The Biden administration has announced the selection of 15 drugs for the second round of Medicare price negotiations, marking one of its final healthcare policy acts before the transition to the Trump administration. This move, enabled by the Inflation Reduction Act passed two years ago, aims to reduce pharmaceutical costs within the Medicare program.

High-Profile Drugs Targeted for Negotiation

Among the selected medications is semaglutide, the active ingredient in Novo Nordisk's widely popular drugs Ozempic (for diabetes) and Wegovy (for weight loss). The inclusion of these drugs is particularly significant given their recent surge in use across the United States. While Medicare cannot cover drugs solely for weight loss, Wegovy's approval for reducing cardiovascular risk in overweight or obese individuals with heart disease makes it eligible for negotiation.

Other notable drugs on the list include:

• Xtandi, Ibrance, Calquence, and Pomalyst for various cancers
• Trelegy Ellipta for asthma and chronic obstructive sleep apnea
• Otezla for psoriasis
• Vraylar, an antipsychotic medication

Impact and Implementation

The Centers for Medicare and Medicaid Services (CMS) reports that approximately 5.25 million Medicare beneficiaries used one of the 15 selected medicines between November 2023 and October 2024. During this period, Medicare's gross spending on these products totaled $41 billion, accounting for about 14% of total prescription drug costs under the program's Part D benefit.

CMS Administrator Chiquita Brooks-LaSure emphasized the importance of drug accessibility, stating, "The U.S. has the most innovative treatments in the world. But that's only meaningful if people can actually access them."

The negotiation process, set to conclude in November 2025, will result in "maximum fair prices" taking effect in 2027. This marks the second round of negotiations under the Inflation Reduction Act, following the first round which resulted in prices 38% to 79% lower than the drugs' list prices, according to CMS.

Industry Response and Future Uncertainties

The pharmaceutical industry has strongly opposed these negotiations, arguing that they amount to price-setting rather than true negotiation. Several companies have filed lawsuits challenging the law's constitutionality, though these efforts have been unsuccessful so far.

As the negotiation process moves forward, uncertainty looms regarding how the incoming Trump administration will handle these talks. While Trump may not seek to repeal the Inflation Reduction Act entirely, some pharmaceutical companies, including Eli Lilly, reportedly plan to request a pause in negotiations.

Despite industry pushback, CMS maintains that its actions adhere strictly to the law. Brooks-LaSure emphasized, "The law is clear and straightforward in how it specifies the criteria for how the drugs are selected for negotiation. CMS followed the law's criteria, and that is how we determined the 15 drugs for selection."