Medicare prices for blockbuster weight loss drugs Ozempic and Wegoby are likely to fall starting in 2027, as they are included in a list of drugs whose prices are negotiated directly between the government and drug companies.
The Biden administration released the list on Friday, but this year's price negotiations will be overseen by the incoming Trump administration.
Late last year, the Biden administration separately proposed expanding federal coverage of weight-loss drugs to millions of Americans, but it's unclear whether the Trump administration will follow through on the proposal. Even if negotiations result in significant price reductions, expanding coverage would increase overall government spending on those drugs.
The drug, made by Novo Nordisk, was selected for price negotiations along with more than a dozen other widely used and expensive drugs as part of a program created by President Biden's signature bill, the Inflation Control Act. It was. It's unclear how much Medicare prices will fall in Ozempic and Wegobee. As with some drugs in previous bargaining programs, price reductions are likely to be small and will likely result in little savings for the government.
But if Medicare agrees to negotiate steeply lower prices for weight-loss drugs, it could have ripple effects on the broader market for a drug that has transformed obesity treatment and become a cultural touchstone.
There is great demand for this drug, but the cost is so high that many employers, insurance companies, and government programs do not cover it. These insurance plans are typically only available to patients who can pay a few hundred dollars a month out-of-pocket.
The negotiating program, which is associated with Mr. Biden, offers President-elect Donald J. Trump an opportunity to portray himself as a tough negotiator who has taken on drug companies and won. The Trump administration would be required by law to implement the plan in much the same way as the Biden administration, but courts and lawmakers could intervene. And several Republicans in Congress, with support from the pharmaceutical industry, have introduced bills to repeal or tweak the program.
If confirmed, Robert F. Kennedy Jr., Trump's nominee for health secretary, will lead negotiations. He has been a vocal critic of Ozempic, calling it inferior to eating healthy food, but recently said such drugs “have a role” in fighting obesity. Although Kennedy has spoken out against drug companies' profiteering, he has not focused on drug prices.
The legislation gives the Trump administration until the end of November to announce new Medicare prices for Ozempic, Wigovy and other drugs on Friday's list.
Trump has not said whether he intends to expand Medicare coverage of weight loss drugs. He has also not said whether he supports a Medicare bargaining program, although he hinted at the idea during his 2016 campaign and later dropped it during his first term. Trump administration officials could find ways to weaken the program without abolishing it, such as by being less aggressive in negotiations.
The weight-loss drug selected for negotiation is semaglutide, which is sold as Ozempic for diabetes and Wigovy for obesity. While Medicare currently covers Ozempic for millions of people with diabetes and Wegoby for a much smaller number of people with both heart disease and obesity, the agency says it cannot cover Wegoby solely for weight loss purposes. Not recognized. The Biden administration's proposal would circumvent that restriction and expand Medicare and Medicaid coverage to millions of obese people.
Medicare does not disclose how much it will pay for drugs, taking into account often-heavy discounts. But it's clear that Medicare's discounted price for the semaglutide product is already thousands of dollars cheaper than the list price of Ozempic's $12,000 a year and Wegoby's $16,000 a year.
The nonpartisan Congressional Budget Office predicted that, thanks to negotiations, the price of semaglutide products in Medicare “will fall significantly starting in 2027.”
That would also open the door to lower prices for competing obesity drugs, such as Eli Lilly's Zepbound. Pharmacy benefit managers who negotiate drug prices will have more leverage to demand lower prices for semaglutide, similar to what the government pays. If the government expanded coverage of obesity drugs, the CBO predicted that the amount Medicare would spend per patient taking the drugs would drop by about one-third by 2027.
That would slow growth in government spending on obesity drugs even as more people enroll in Medicare.
The new prices for the 10 items in the first round of price negotiations were announced last summer. These prices will take effect next year.
The drug company was relieved that the cut was not deeper. They sued to block the price-haggling program, but lost.
