The blockbuster GLP-1 agonists Ozempic and Wegovy are included in next round of HHS price negotiations under the authority of the Inflation Reduction Act.  These drugs are bankrupting health care insurance plans across the country.

The newly negotiated prices will not take effect until 2027.  The targeted drugs' manufacturers must agree to participate in these negotiations within a month or they will incur tax penalties:

https://www.cms.gov/newsroom/press-releases/hhs-announces-15-additional-drugs-selected-medicare-drug-price-negotiations-continued-effort-lower

HHS Announces 15 Additional Drugs Selected for Medicare Drug Price Negotiations in Continued Effort to Lower Prescription Drug Costs for Seniors

Medicare has selected 15 more drugs to negotiate directly with participating drug companies. Building on the success of the first round of negotiations, the aim is to lower prices for some more of the costliest prescription drugs.  

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced the selection of 15 additional drugs covered under Medicare Part D for price negotiations. In accordance with the Inflation Reduction Act, the negotiations with participating drug companies for these 15 drugs will occur in 2025 and any negotiated prices will become effective in 2027. Between November 2023 and October 2024, about 5.3 million people with Medicare Part D coverage used these drugs to treat a variety of conditions, such as cancer, type 2 diabetes, and asthma. These selected drugs accounted for about $41 billion in total gross covered prescription drug costs under Medicare Part D, or about 14%, during that time period. When combined with the total gross covered prescription drug costs under Medicare Part D of the 10 drugs selected for the first cycle of negotiations over that same time period, this represents over a third of total gross covered prescription drug costs under Medicare Part D.

“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.”

“The Biden-Harris Administration continues to make history by announcing the latest round of drugs selected for the Medicare Drug Price Negotiation Program, with the goal of improving access to some of the costliest drugs while saving the American people billions of dollars,” said CMS Administrator Chiquita Brooks-LaSure. “Improving prescription drug affordability for Medicare enrollees is the core of the Inflation Reduction Act, and the next cycle of negotiations will continue to strengthen Medicare for generations to come.”

The selected drug list for the second cycle of negotiations is: 

• Ozempic; Rybelsus; Wegovy 
• Trelegy Ellipta 
• Xtandi
• Pomalyst
• Ibrance
• Ofev
• Linzess
• Calquence
• Austedo; Austedo XR 
• Breo Ellipta 
• Tradjenta
• Xifaxan
• Vraylar
• Janumet; Janumet XR 
• Otezla

In accordance with the final guidance for the second cycle of the Drug Price Negotiation Program, drug companies with a selected drug will have until February 28, 2025 to decide if they will participate in negotiations. In negotiating with participating manufacturers, 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, among other considerations, such as costs associated with research and development as well as production and distribution for selected drugs.  

Thanks to the Inflation Reduction Act – the historic law lowering health care costs – Medicare is now able to negotiate the prices of certain prescription drugs with the aim to make drugs more affordable for seniors and for people with disabilities. In August 2023, HHS announced the 10 drugs covered under Medicare Part D selected for the first cycle of negotiations. 

In the first cycle of negotiations, Medicare negotiated with the participating drug manufacturers and reached agreement on new, lower prices for all 10 drugs. Those prices will become effective starting January 1, 2026. If the new prices had been in effect in 2023, they would have saved an estimated $6 billion in net covered prescription drug costs, or approximately 22 percent, across the 10 selected drugs. The new, lower prices range from 38 to 79 percent discounts off of list prices. In 2026, people with Medicare prescription drug coverage are expected to see aggregated estimated savings of $1.5 billion in their personal out-of-pocket costs. 

In future years, CMS will select for negotiation up to an additional 15 drugs for the third cycle of negotiation (including drugs covered under Part B and Part D), and up to 20 more drugs for each cycle after that, as outlined in the Inflation Reduction Act. 

Earlier this week, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) also released new data detailing the projected impact of the new out-of-pocket cap on covered prescription drugs for Medicare Part D enrollees. About 11 million people with Medicare Part D are expected to hit the $2,000 cap in 2025 and will no longer have out-of-pocket drug costs after reaching the cap. These 11 million Medicare Part D enrollees are projected to save a combined $7.2 billion, or about $600 per enrollee. Among these enrollees, those who do not receive financial assistance for their prescription drug costs are expected to save even more – an average $1,100 per enrollee in 2025.

View a CMS fact sheet on the drugs selected for the Medicare Drug Price Negotiation Program at:  https://www.cms.gov/files/document/factsheet-medicare-negotiation-selected-drug-list-ipay-2027.pdf

View the Projecting the Impact of the $2,000 Part D Out-of-Pocket cap for Medicare Part D Enrollees with High Prescription Drug Spending from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) at  https://aspe.hhs.gov/reports/impact-ira-2000-cap .

More information on the Medicare Drug Price Negotiation Program is available at  https://www.cms.gov/inflation-reduction-act-and-medicare/medicare-drug-price-negotiation . 

For more information about the Inflation Reduction Act, including plain language materials, please visit LowerDrugCosts.gov. For more information available in Spanish, please visit MedicamentosBajoPrecio.gov.