Medicare negotiates 36% price cuts on 15 costly drugs, saving $8.5 billion starting 2027, including Novo Nordisk’s Wegovy and Ozempic.
WASHINGTON: The US Medicare health programme announced newly negotiated prices for 15 of its most expensive drugs will save 36% compared to recent annual spending.
These negotiated prices will save approximately $8.5 billion in net covered prescription costs when they take effect in 2027.
Novo Nordisk’s popular GLP-1 drug semaglutide, sold as Wegovy for weight loss and Ozempic for diabetes, will have a monthly price of $274.
Medicare’s recent net price for Ozempic was $428 monthly, while the drug’s list price before rebates stood at $959 monthly.
Based on nondiscounted list prices, Medicare said savings on the 15 drugs ranged from 38% to 85%.
“They were gonna go to the table and try and push on those prices, and that’s what they did,” said William Padula, professor of pharmaceutical and health economics at the University of Southern California.
AstraZeneca’s leukemia drug Calquence, Boehringer’s lung treatment Ofev and Pfizer’s breast cancer drug Ibrance saw the largest reductions, each cut by over $4,000 from estimated net prices.
The annual price negotiations were established under President Joe Biden’s signature Inflation Reduction Act of 2022.
Previously, Medicare was legally barred from negotiating directly with drug manufacturers.
The projected 2027 savings of 36% exceeds the 22% savings achieved in last year’s first round of price negotiations for 10 different drugs.
“They are getting more efficient with their methodology,” Padula noted, adding this latest batch likely had “more wiggle room” on price.
Additional drugs negotiated this year included GSK’s asthma and COPD inhaler Trelegy Ellipta, priced at $175 versus its $654 list price.
AbbVie’s irritable bowel syndrome medicine Linzess will cost $136, reduced from $539.
The pharmaceutical industry has strongly opposed these government pricing efforts.
“Whether it is the IRA or MFN, government price setting for medicines is the wrong policy for America,” said Alex Schriver, spokesperson for industry body PhRMA.
Medicare covers more than 67 million Americans aged 65 and over and those with disabilities.
“These prices are going to come down below the existing net prices. There will be some real savings,” said Sean Sullivan, professor of pharmacy at the University of Washington.
He added that other payers might now demand similar pricing from manufacturers.
For comparison, last year’s negotiated prices for the first 10 drugs were still typically more than double what drugmakers charge in other high-income countries.
Many other nations have long used centralized price negotiations with manufacturers for universal prescription drug coverage.
Medicare’s next round of drug price talks is expected to include 15 additional medicines and begin in February. – Reuters
