President Biden and his team are eyeing another round of negotiations this time seeking drugs on Medicare that are billed as popular but expensive, such as weight loss medications, which include Ozempic and Wegovy.
Insurance companies have been addressing these medicines as cost-cutting ones, but this certainly isn’t the case as the injection price for Ozempic ranges from $994.96 for normal use and up to $1252.78 for high use; conversely, Wegovy’s price range has been estimated to be $1348 to $1787 depending on the conditions. There is no contest that these medicines will be effective, but the average American who is already faced with the burden of expensive insurance will find these medications all but useless.
Expanding the list of negotiated drugs
Medicare has now added 15 drugs to the list of those it’s allowed to negotiate, in contrast to the previous round, which had only 10, promoting the growth of one of the widest areas of Medicare competition-negotiations. Merck and Pfizer Claim this is the first instance during the 2022 IRA that was put into effect, where Medicare can now negotiate the prices for the drugs directly with the pharmaceutical industries, yet these negotiations are exhausting and will not be functional until 2027. The political landscape could also influence these efforts, as the newly elected President Trump has never talked about this and neither has the new secretary for Health and Human Services.
According to a press release issued by the Centres for Medicare and Medicaid Services (CMS) between November 2023 and October 2024, it is estimated that over 5.3 million people who are part of Medicaid will use the 15 drugs likely to be targeted for this negotiation. These drugs were responsible for around $41 billion in gross prescription returns, which is 14% of the total amount spent on Medicaid drugs.
HHS Secretary Xavier Becerra highlighted the significance of these negotiations, stating:
“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. Today’s announcement is pivotal—the Inflation Reduction Act is lowering prices for people on Medicare.”
The new list includes drugs used for a variety of conditions, such as diabetes, cancer, and chronic lung diseases. Notable drugs on the list are:
- Ozempic, Wegovy, Rybelsus
- Trelegy Ellipta
- Xtandi
- Ibrance
- Otezla
- Vraylar
- Janumet and Janumet XR
GLP-1 drugs and their growing demand
Ozempic and Wegovy are part of the GLP-1 receptor agonist class along with semaglutide. They were created to assist with diabetes treatment but have gone through clinical trials to also help with weight loss. By copying gut hormones that suppress appetite and slow down the gastric processes, these drugs have been shown to greatly assist in lowering body weight targets. Semaglutide is, however, not FDA-approved for such use and therefore cannot market itself off such claims along with Ozempic, which is FDA-approved for diabetes, nor can Wegovy, as it is still undergoing testing. If released in the wild, these drugs would wreak havoc financially for the people, especially the old who rely on Medicare, due to the sheer demand for the drugs the US has.
These medications, such as Rybelsus, are injected once a week, but Rybelsus is one of many that simply has a lower rate of dosage per week, making it easier to administer.
Future plans under the Inflation Reduction Act
As the Biden Administration advances these negotiations, the outcome could set a significant precedent for drug pricing reforms, potentially reshaping how the healthcare system handles high-cost medications.
The IRA outlines an ambitious roadmap for lowering drug prices. If negotiations succeed, Medicare will have reduced the cost of 25 commonly used drugs. Moving forward, CMS plans to identify up to 15 additional drugs for negotiation in each subsequent round, including those covered under Part B and Part D. By addressing the affordability of widely used medications, these efforts aim to make essential treatments more accessible to millions of Americans while easing the financial burden on taxpayers.
