Novo Nordisk’s blockbuster diabetes drug, Ozempic, may be included in upcoming price negotiations between drug manufacturers and Medicare, according to analysts. The Biden administration recently released a list of the first 10 drugs subject to negotiations to reduce Medicare Part D spending, with the changes set to take effect by 2026. While Ozempic wasn’t eligible for the initial round of negotiations due to government guidelines, it is expected to be eligible for the next round in 2025, with price changes taking effect in 2027.
Ozempic is anticipated to be a top candidate for negotiations because Medicare Part D spent over $2 billion on the drug in 2021, a figure comparable to some of the medications selected for current negotiations. Since there is a high demand for Ozempic and similar drugs that aid weight loss, it is expected that Medicare will continue to spend significantly on it in the coming years.
Novo Nordisk’s Rybelsus, an oral diabetes drug with the same active ingredient as Ozempic, could also be a contender for negotiations, as both drugs are typically covered by most Part D plans for Type 2 diabetes but not for off-label uses like weight loss.
Novo Nordisk’s obesity injection, Wegovy, which shares the same ingredient as Ozempic, may not be targeted for negotiations in the near term because Medicare does not currently cover weight loss drugs. However, recent research showing Wegovy’s heart health benefits may increase its chances of gaining coverage in the future.
Reducing the price of Ozempic through negotiations could result in significant savings for the Medicare program, potentially saving an estimated $1.3 billion if the price is reduced by 40%. Lower drug costs could benefit the approximately 28% of Medicare beneficiaries who have diabetes.
Overall, Ozempic’s high expenditure by Medicare and its eligibility for future negotiations make it a key candidate for potential price reductions, reflecting the broader effort to address the cost of medications for Medicare beneficiaries.
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