Updated January 17, 2025 at 12:49 PM ET
The Biden administration, in its last full weekday in office, announced the next 15 drugs up for Medicare price negotiation. Blockbuster diabetes drug Ozempic is on the list.
That means the federal government and the pharmaceuticals industry are about to go head-to-head once again. The Centers for Medicare and Medicaid Services negotiated prices for a first batch of drugs last year — something it could only do because of the Inflation Reduction Act, which passed in 2022. Those new prices go into effect in January 2026.
For the second group of drugs, discussions between the federal government and manufacturers will take up most of 2025. "Once again, we have a chance to negotiate a better deal for the American people," Secretary of Health and Human Services Xavier Becerra said in a statement. "We believe that we can be successful once again."
The list includes:
- Ozempic, Tradjenta, Janumet (type 2 diabetes)
- Rybelsus (type 2 diabetes, cardiovascular disease)
- Wegovy (obesity, cardiovascular disease)
- Trelegy Ellipta, Breo Ellipta (asthma, COPD)
- Xtandi (prostate cancer)
- Pomalyst (Kaposi sarcoma, multiple myeloma)
- Ibrance (breast cancer)
- Ofev (some pulmonary fibrosis)
- Linzess (some forms of chronic constipation and irritable bowel syndrome)
"It's obviously a big deal that Medicare will be negotiating the price for Ozempic and Wegovy," says Dr. Ben Rome, a physician and health policy researcher at Harvard Medical School. "This is a tremendous opportunity for the Medicare program to negotiate a fair price that will allow the drug to be affordable for patients and for the government."
He added that since the list includes drugs that treat so many conditions, the negotiations will have a broad impact.
The 15 new drugs combined with the 10 drugs in the first batch represent about a third of Medicare Part D spending on prescription drugs, Becerra said.
"It is important to remember that for some people, this is a big deal," Becerra said. "Some folks have to cut the pills in half or skip a dose in their prescription so that they can make their prescription last longer until they can afford to buy the next batch of drugs."
The White House announced the first batch of negotiated Medicare drug prices in August after negotiating them for months. Those 10 lower prices – which ranged from a price cut of 79% for Type 2 diabetes drug Januvia to a 38% cut for cancer drug Imbruvica – will go into effect in January 2026. That means for Januvia the price Medicare would pay would go from $527 to $113 for a month's supply.
The savings to taxpayers, which the administration expects to be $6 billion next year when the prices take effect, will help offset the added costs of the new $2,000 cap on annual Medicare drug copays, which was also part of the Inflation Reduction Act and went into effect on Jan. 1 of this year.
"It is important to remember that for some people, this is a big deal," Becerra said. "Some folks have to cut the pills in half or skip a dose in their prescription so that they can make their prescription last longer until they can afford to buy the next batch of drugs."
The White House announced the first batch of negotiated Medicare drug prices in August after negotiating for reduced prices for months. The 10 new lower prices — which ranged from a price cut of 79% for Type 2 diabetes drug Januvia to a 38% cut for cancer drug Imbruvica — will go into effect in January 2026.
Picking the drugs
The government can't pick just any drugs to target for price negotiation. There are certain rules laid out in the Inflation Reduction Act that say which drugs in Medicare are eligible.
Generally, they can't be new, and can't have competition from generic or biosimilar products.
The government had until Feb. 1 to announce the next batch of drugs. And it had to use data that ran through Jan. 15 in making its drug selections.
Friday's announcement comes a few weeks before that deadline, but the administration has been early in meeting its deadlines in the past.
It's also possibly the last day the Biden administration can tout its work on lowering prescription drug prices.
The administrator for Medicare and Medicaid, Chiquita Brooks-LaSure, told NPR she does not believe the Trump administration can switch the drugs once they have been announced.
"The law is very prescriptive about how we choose the next 15 drugs, and we followed the law and all of our steps," she said. "And so there should be no reason why the administration would want to make any changes."
Possible hurdles under Trump
There are some ways the incoming Trump administration can hinder drug price negotiation, which conservatives oppose because they say it will lead to the development of fewer treatments. It could repeal all or part of the Inflation Reduction Act — where Medicare gets this negotiating power.
That's the plan backed by some influential conservatives and Trump advisers, according to Project 2025 — a wish-list of policy proposals authored by a constellation of Republican-aligned policy groups including The Heritage Foundation. Among the drafters: Roger Severino, who served as Director of HHS's Office for Civil Rights from 2017 to 2021.
Until a Republican-controlled congress can repeal the Inflation Reduction Act, Project 2025 suggests implementing the existing law in a way that minimizes its effects.
Trump's specific plans are unclear; he has alternately embraced and distanced himself from the Project 2025 document.
The pharmaceutical industry also has lawsuits pending challenging the law.
The next steps
The drug manufacturers have until the end of February to sign an agreement saying they'll participate in this round of negotiations. Then they have some time to submit required data such as a drug's research and development costs, sales, and revenue.
The government will give its opening bid on June 1, though it will remain secret. The negotiations will continue back and forth until Halloween, when the companies accept or reject the final offer from the government.
If they reject the offer, their drugs could be dropped from Medicare Part D, meaning they'd lose access to more than 50 million potential customers enrolled in the program.
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