Medicare Secures Major Discounts on 15 Drugs, Including Ozempic

The federal government has announced significant reductions in drug prices for Medicare beneficiaries, with discounts on 15 medications set to take effect in 2027. Among the most notable cuts are a 71% reduction on Ozempic, Wegovy, and Rybelsus, drugs widely used for obesity and Type 2 diabetes, which currently have list prices of approximately $1,000 per month. These negotiations also encompassed treatments for asthma, breast cancer, and leukemia, highlighting the government’s ongoing efforts to enhance affordability in healthcare.

The discounts varied considerably, with reductions ranging from 38% for Austedo, a medication for Huntington’s disease, to an impressive 85% for Janumet, also aimed at managing Type 2 diabetes. “President Trump directed us to stop at nothing to lower healthcare costs for the American people,” stated Robert F. Kennedy, Jr., Secretary of Health and Human Services, in a press release. He emphasized the administration’s commitment to utilizing every available resource to ensure affordable healthcare for seniors.

This latest round of negotiations follows the initial price reductions implemented last year, resulting from the Inflation Reduction Act passed in 2022. This landmark legislation, which received no support from Republican lawmakers, lifted a long-standing ban on Medicare’s ability to negotiate drug prices, marking a pivotal shift in healthcare policy. The negotiations for this second batch concluded at the end of October.

According to the Centers for Medicare and Medicaid Services (CMS), the newly negotiated prices are projected to save the Medicare program $12 billion if applied to 2024 expenditures. Dr. Benjamin Rome, a health policy researcher at Brigham and Women’s Hospital in Boston, praised the outcome, noting that the larger savings are due to the selection of high-spending drugs this year and accumulated experience from prior negotiations.

The drugs were selected based on criteria established in the law, including the absence of generic or biosimilar competition, significant Medicare spending, and a history of being on the market for several years. The substantial discounts on Ozempic and Wegovy come in the wake of a separate agreement made by the Trump administration with Novo Nordisk, the manufacturer of these drugs. This agreement, announced on November 6, aimed to align U.S. drug prices with those in other developed countries.

Interestingly, the negotiated prices from the recent Medicare discussions were less generous than those outlined in the previous deal with Novo Nordisk. While that agreement set a monthly price of $245 for Ozempic and Wegovy, the new Medicare prices will be $274 per month. Dr. Rome noted the confusion surrounding this discrepancy, questioning why the company would offer differing prices in two separate contexts. In its statement, Novo Nordisk expressed its eagerness for further clarification from CMS regarding pricing and coverage mechanics.

The previous deal aimed to broaden access to obesity treatments within Medicare and Medicaid, extending eligibility to individuals with a body mass index (BMI) over 35 and those with a BMI above 27 who have additional health conditions. However, the specifics of how this will be implemented remain unclear.

Novo Nordisk reaffirmed its commitment to advocating for affordable access to its medications but voiced concerns regarding the long-term implications of the Inflation Reduction Act, expressing opposition to government-set prices.

Advocacy groups have reacted positively to the recent negotiations. The AARP, representing over 125 million Americans aged 50 and older, welcomed the announcement as a significant step forward in efforts to reduce prescription drug costs. Dr. Myechia Minter-Jordan, CEO of AARP, stated, “Older Americans across the political spectrum consistently say lower drug prices are a top priority, and these negotiated prices will bring meaningful relief to millions of people on Medicare.”

As the implementation of these new prices approaches, the ongoing discourse around drug pricing and healthcare affordability continues to shape the landscape of American healthcare policy.