Medicare Announced the Next Round of Drug Price Negotiations Include Ozempic

The Biden administration announced Friday, January 17, 2025, the next set of prescription drugs selected for Medicare price negotiations, featuring 15 medications, including Ozempic and Wegovy—widely used for diabetes and weight loss. Public frustration over their high prices has driven demand for more affordable options.

This marks the second round of negotiations under the Inflation Reduction Act of 2022. The newly negotiated prices, however, won’t take effect until 2027. The upcoming Trump administration has yet to declare its stance on the program, creating uncertainty about its future.

The drugs selected to undergo negotiations are:

• Ozempic; Rybelsus; Wegovy, for Type 2 diabetes and weight loss.
• Trelegy Ellipta, an asthma treatment.
• Xtandi, for prostate cancer.
• Pomalyst, a chemotherapy drug.
• Ibrance, a breast cancer drug.
• Ofev, for idiopathic pulmonary fibrosis.
• Linzess, a chronic constipation drug.
• Calquence, a cancer drug.
• Austedo; Austedo XR, for Huntington’s disease.
• Breo Ellipta, a COPD drug.
• Tradjenta, a diabetes drug.
• Xifaxan, for diarrhea and irritable bowel syndrome.
• Vraylar, an antipsychotic drug.
• Janumet; Janumet XR, diabetes drugs. 
• Otezla, a psoriatic arthritis drug.

The negotiation process aims to reduce costs significantly for taxpayers, potentially saving billions. Drugmakers have a month to participate or face tax penalties unless they exit Medicare entirely, cutting off access to a massive market share. A Centers for Medicare and Medicaid Services (CMS) official confirmed discussions with manufacturers begin soon.

Trust AAP and our national primary wholesaler to keep you updated with the latest information about these negotiations. And API Warehouse is your best source for generic medications. Learn how API can enhance your pharmacy’s your cost savings and optimize your generic medication ordering.

The Food and Drug Administration has issued a one-year delay on the final enhanced drug distribution security requirements under the Drug Supply Chain Security Act (DSCSA). Those requirements were set to take effect in November. The new date will be Nov. 27, 2024.

The decision to delay the DSCSA requirements was made after several advocates warned the FDA that the supply chain was not ready to comply. The extended time aims to allow each sector of the pharmaceutical supply chain time to develop the systems and processes necessary for efficient transactions. Read more.

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Moderna’s updated COVID-19 vaccine is effective against Eris variant

In this Weekly Rx Roundup, Moderna reports an initial study data showed its updated COVID-19 vaccine to be effective against the “Eris” and “Fornax” subvariants in humans.

The company expects the updated shot to be available, pending approval from the FDA, in the coming weeks for the fall vaccination season.

Pfizer has reported that its updated COVID-19 shot showed success at neutralizing activity against the Eris subvariant in a study conducted on mice. Pfizer has yet to complete its study in humans.

Eris, the nickname for EG.5, is a sub-lineage of the still-dominant Omicron variant. EG.5 accounted for about more than 17% of COVID-19 cases in the U.S., according to the latest government data. Infections from Fornax, officially known as FL 1.5.1, are also rising across the country.

Two big PBM stories in this Weekly Rx Roundup

Shares of CVS Health plunged 8% on Thursday after Blue Shield of California said it will drop the company’s pharmacy benefit management services and instead partner with Mark Cuban’s Cost Plus Drugs company and Amazon Pharmacy to save on drug costs for its nearly 5 million members. 

The announcement hints at the potential for health insurers to abandon the traditional pharmacy benefit manager, or PBM, system and sent shares of other companies that offer PBM services lower.

CVS Health’s Caremark has been Blue Shield’s PBM partner for more than 15 years. 

The other big story is that the United States Tenth Circuit Court of Appeals on Tuesday issued an unfavorable decision in the Pharmaceutical Care Management Association (PCMA) v. Mulready appeal.

The decision overturns Oklahoma’s effort to regulate pharmaceutical benefit managers (PBMs) – and likely would have implications for other states as well. The ruling allowing PBMs to escape certain state regulation by hiding behind the alleged preemption of that law by federal ERISA and Medicare Part D laws. 

“The Tenth Circuit decision is inconsistent with what other federal courts have decided, and it departs from the Supreme Court’s unanimous Rutledge decision, which clearly held that PBMs can’t hide behind ERISA. It must be overturned,” said B. Douglas Hoey, CEO of the National Community Pharmacists Association.

AAP is following this story closely and will keep you updated as it unfolds.

A group of pricey breakthrough prescription drugs are poised to shake up the market this year — including an Alzheimer’s treatment that could be approved today by the FDA.

Why it matters: Though the drugs offer hope to patients with hard-to-treat conditions like Alzheimer’s or sickle cell disease, or who struggle with obesity, their potentially eye-popping prices are sure to create dilemmas for insurers, government programs and patients themselves.

The big picture: The approvals could fuel already-contentious debates around affordability and equity, giving ammunition both to those who say innovation doesn’t come cheap and others who contend medical advances are meaningless if patients can’t access them.

• Although some of the drugs could be transformative, “they will create choices that need to be made and they will also create potential burdens, particularly on the most vulnerable, on people who are the least well-insured and people who live in states or happen to have insurance coverage that is the least generous,” said Rena Conti, a professor at Boston University’s Questrom School of Business.
• None of the drugs would be subject to the price controls that congressional Democrats included in the Inflation Reduction Act.

Driving the news: The FDA is expected to today decide whether to approve Eisai and Biogen’s lecanemab, a treatment for Alzheimer’s disease, setting into motion another round of debate over how much the drug should cost and whether Medicare should cover it.

• It would become the second FDA-approved Alzheimer’s treatment targeting amyloid plaques that are believed to contribute to the development of the disease. But it isn’t likely to cause as much controversy as Biogen’s Aduhelm did when it was approved in 2021.
• Biogen initially priced that drug at $56,000 a year, drawing outrage from critics and presenting big questions about how Medicare could absorb the large spending spike if millions of beneficiaries tried to get it.
• If lecanemab is approved, experts will be closely watching both its list price and whether the FDA limits its use to subgroups of Alzheimer’s patients. Both factors will be crucial in determining potential spending on the drug.
• A cost-effective price would be between $8,500 and $20,600 a year, the Institute for Clinical and Economic Review said last month.

State of play: The drug pipeline is brimming with other experimental cures that could make headlines this year.

• Data for another promising Alzheimer’s treatment by Eli Lilly that is similar to lecanemab is expected midyear, per a recent Cowen research note, and Medicare will almost certainly have to revisit its coverage policy for the entire class of drugs.
• Several multi-million dollar gene therapies have already been approved. But this year the pipeline includes two treatments for sickle cell disease, which has a much larger patient population.
• Clinical trial results for Eli Lilly’s obesity drug candidate are also expected in April, potentially ushering a new entrant to what could become a booming market. Disputes over coverage of obesity drugs already on the market will almost certainty continue.

Between the lines: Some novel drugs present an inherent dilemma: They’re worth a lot of money because of the way they can dramatically improve patients’ lives. Even so, manufacturers can still price these drugs well above what experts say they’re worth.

• Gene therapies may cost millions per patient. Other drugs could cost much less per course, but cater to enormous patient populations or may require long-term use.
• In any scenario, the expense could present complex problems to federal and state health programs, private insurers and patients who wind up on the hook for out-of-pocket costs.
• “We’re fortunate there are so many treatments in the pipeline that promise to transform the quality of care for people with devastating diseases. While we recognize there are concerns about cost, the facts point to a health care system that can sustain this incredible innovation over the long haul,” said Priscilla VanderVeer, vice president of public affairs at PhRMA.

Yes, but: The final cost burden hinges on several factors, starting with where manufacturers set the launch price.