Ozempic, Wegovy among drugs subject to Medicare price controls

Highly coveted weight-loss related diabetes drugs produced by Danish drugmaker Novo Nordisk are among the medications that will be subject to price controls by Medicare.

On Friday, the Centers for Medicare & Medicaid Services (CMS) released the second list of prescription medications covered under Medicare Part D. The list has 15 drugs, touted as an effort to help lower the financial burden for millions of patients who are 65 years and older.

It includes Novo Nordisk’s weight loss and diabetes drugs Wegovy and Ozempic, as well as Xtandi, Ibrance, Calquence and Pomalyst, drugs that treat prostate, breast, blood and bone marrow cancers. Price controls for the recently selected drugs will become effective in 2027.

OALITION CALLS ON CONGRESS TO REPEAL BIDEN’S PRESCRIPTION DRUG PRICE CONTROLS

Under the Inflation Reduction Act (IRA), which was signed into law in 2022, Medicare was given the authority to set lower prices on selected covered high-expenditure drugs.

While the IRA refers to “negotiation,” the text of the legislation allows the CMS to set a “maximum fair price” for a drug. The pharmaceutical company then must “enter into agreement” for the price. If they do not, the government will assess a daily excise tax on every drug sold over the “maximum fair price.”

The move has faced criticism from drugmakers, including Novo Nordisk, which told FOX Business that it “remains opposed to government price setting through the IRA and has significant concerns about how the law is being implemented by this administration, including aggregating multiple products that individually would not meet the requirements of the statute.”

The company believes the price-setting process, which could “negatively impact patients’ ability to access their medicines and threatens to stifle future scientific development of life-changing medicines for chronic diseases in which there is a real unmet need.”

In October 2023, shortly after the first 10 drugs were announced, a coalition of more than 40 groups called on Congress to repeal the Drug Price Negotiation Program included in the IRA, arguing that the price control scheme run by the Biden administration will ultimately lead to shortages of medicines and higher costs.

The coalition of more than 40 groups sent a letter to federal lawmakers shortly after the Biden administration released their first list of 10 drugs, which included Merck’s diabetes drug Januvia, Johnson & Johnson’s blood thinner Xarelto, as well as Pfizer and Bristol Myers Squibb’s blood thinner Eliquis, in August 2023.

BIDEN ADMIN NAMES FIRST 10 DRUGS SUBJECT TO MEDICARE PRICE NEGOTIATION

According to the administration, about 5.3 million Medicare Part D recipients used the newly selected drugs for conditions like cancer, Type 2 diabetes, and asthma between November 2023 to October 2024. During that time, the drugs made up around $41 billion, or 14%, of total Medicare Part D prescription costs.

“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,” Department of Health and Human Services Secretary Xavier Becerra said.

Becerra said the agency “will continue negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs.”