“Medicare Shakes Up the Market: 15 More Drugs, Including Ozempic, Face Price Reductions!”

The national government possesses the authority to negotiate the costs Medicare pays for certain medications.

Spencer Platt/Getty Images

hide caption

toggle caption

Spencer Platt/Getty Images

The Biden administration, during its final complete workday in office, has revealed the subsequent 15 medications slated for Medicare price negotiation. The high-demand diabetes medication Ozempic is included in this list.

Hence, the federal government and the pharmaceutical sector are poised to clash once more. The Centers for Medicare and Medicaid Services negotiated prices for an initial set of medications the previous year — a power it could wield solely due to the Inflation Reduction Act, which was enacted in 2022.

“Once again, we have an opportunity to negotiate a more favorable deal for the American populace,” Secretary of Health and Human Services Xavier Becerra stated in a release. “We are confident that we can succeed once again.”

These 15 newly added drugs, combined with the 10 medications from the first batch, account for roughly a third of Medicare Part D expenditures on prescription drugs, according to Becerra.

“It’s essential to bear in mind that for some individuals, this is a significant issue,” Becerra remarked. “Some individuals are required to split their pills or miss a dose in their prescriptions to make their medications last longer until they can afford to secure the subsequent supply of drugs.”

The White House declared the first set of negotiated Medicare drug prices in August following months of negotiation for reduced costs. The 10 newly lowered prices — which varied from a 79% reduction for the Type 2 diabetes medication Januvia to a 38% reduction for the cancer medication Imbruvica — will be effective in January 2026.

Selecting the medications

The government cannot select just any medications within Medicare. There are specific regulations established in the Inflation Reduction Act that specify which drugs are qualified for price reductions.

They cannot be newly introduced, for example, and they should lack competition from generic or biosimilar alternatives.

The government had until February 1 to announce the next group of medications and needed to utilize data that was relevant through January 15 to make its selections.

Friday’s declaration arrives a few weeks prior to that deadline, although the administration has frequently been prompt in meeting its deadlines in the past. It might also be the last occasion the Biden administration can showcase its efforts to reduce prescription drug prices.

Potential obstacles under Trump

There are several avenues through which the incoming Trump administration might impede drug price negotiation. It could revoke all or part of the Inflation Reduction Act — from which Medicare derives this negotiating authority.

This is the strategy outlined by Project 2025, released by the conservative Heritage Foundation and authored by several individuals who were once aligned with Trump, including Roger Severino, who was the Director of HHS’s Office for Civil Rights from 2017 to 2021.

Until a Republican-led congress can abolish the Inflation Reduction Act, Project 2025 proposes executing the existing law in a manner that minimizes its impact.

However, given that Trump has attempted to separate himself from Project 2025, it remains uncertain what will transpire.

The pharmaceutical sector also has ongoing lawsuits contesting the law.

Upcoming actions

The pharmaceutical manufacturers are allotted until the end of February to sign a contract indicating their willingness to engage in this round of negotiations. Following this, they have some time to provide data regarding aspects such as research and development expenses, sales, and income.

The government will propose its initial offer on June 1, though the details will remain confidential. The negotiations will progress until Halloween when the companies will either accept or decline the government’s final proposal.

The finalized negotiated prices will be disclosed approximately a month later, and they will come into effect in January 2027.