Drugmakers will have until the end of February to decide whether they want to participate in the second round of Medicare negotiations or not. CMS has until June 1 to send an initial offer for the adjusted prices.
Two weeks ahead of its Feb. 1 deadline, the Centers for Medicare and Medicaid Services on Friday named the next 15 drug products that would be included in the second round of the drug price negotiations prescripted under the Inflation Reduction Act.
Most notably—and unsurprisingly—the CMS has selected Novo Nordisk’s blockbuster GLP-1 therapy semaglutide, approved as Ozempic in type 2 diabetes and Wegovy in weight loss. Novo’s sister semaglutide type 2 diabetes drug Rybelsus will also be subject to negotiation.
Together, these three therapies racked up almost $14.5 billion in gross Medicare Part D spending from November 2023 to October 2024, according to a factsheet that the CMS released alongside its Friday announcement. There are nearly 2.3 million Part D enrollees who used these three drugs during the same time span.
The other drugs included in the second round of negotiations are:
- GSK’s Trelegy Ellipta asthma and chronic obstructive pulmonary disease (COPD)
- Astellas and Pfizer’s Xtandi, approved for prostate cancer
- Bristol Myers Squibb’s Pomalyst, approved for multiple myeloma
- Pfizer’s Ibrance, approved for breast cancer
- Boehringer Ingelheim’s Ofev, approved for idiopathic pulmonary fibrosis
- AbbVie’s Linzess, approved for irritable bowel syndrome
- AstraZeneca’s Calquence, approved for certain blood cancers
- Teva’s Austedo, approved for Huntington’s disease chorea or tardive dyskinesia
- GSK’s Breo Ellipta, approved for COPD and asthma
- Boehringer Ingelheim’s Tradjenta, approved for type 2 diabetes
- Salix’s Xifaxan, approved for travelers’ diarrhea caused by noninvasive strains of E. coli
- AbbVie’s Vraylar, approved for major depressive disorder and bipolar I disorder
- Merck’s Janumet, approved for type 2 diabetes
- Amgen’s Otezla, approved for inflammatory diseases such as plaque psoriasis and psoriatic arthritis
According to the CMS, these drugs were selected based on their “gross covered prescription drug costs,” among other criteria. Between November 2023 and October 2024, approximately 5.3 million Part D beneficiaries used the selected drugs, costing the government around $41 billion in gross drug spending.
Xavier Becerra, Secretary of the Department of Health and Human Services (HHS), in a statement called Friday’s list “pivotal,” noting that the first round of the Medicare program “proved that negotiating for lower drug prices works.” HHS, through CMS, will “build on that record,” he continued, “negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs.”
Companies now have until Feb. 28 to signify their intent to participate in the negotiations—or not. Through March and April 2025, CMS will host several stakeholder engagement sessions as well as one town hall to gather feedback from relevant parties regarding the pricing of the selected drugs. CMS has until June 1 to send its initial offer to the drugmakers, which will then have a month to either accept or file a counter offer. The final prices will take effect in 2027.
A Predictable List
Experts and industry observers have in recent months released multiple forecasts for drugs that would most likely be included in the second cycle of the Medicare negotiation program. Friday’s list confirms many of those predictions.
A September 2024 list published in the Journal of Managed Care & Specialty Pharmacy, for instance, correctly identified more than 10 products that eventually made it onto CMS’s list, including Ozempic, Ibrance, Linzess and Calquence.
Of these drugs, Ozempic was the most obvious candidate for the second round of negotiations. In an interview with BioSpace last fall, Barclays’ Emily Field said “there’s no way [Ozempic’s] not going to be in there.” A month earlier, Reuters reported that analysts on Wall Street had also largely expected Ozempic to be on the list.
Ozempic and its sister brands were predicted to make the list in large part because they’ve been on the receiving end of very public calls for price cuts. In April 2024, for instance, Sen. Bernie Sanders (I-Vt.) opened a probe on Ozempic, blasting what he called the “outrageously high prices” of the drug. Sanders was spurred by a study published in JAMA that found that semaglutide could profitably be produced at less than $5 a month.
A few months later, in July, President Biden joined Sanders in penning an opinion piece for USA Today, calling on Novo and fellow obesity leader Eli Lilly to lower their drug prices.
