Patrick Wingrove and Dina Beasley
(Reuters) – The U.S. government is expected to announce negotiated prices for the 15 most expensive prescription drugs under its Medicare health plan this week, a potential signal of the Trump administration's push to lower health care costs.
Earlier this month, the government announced an agreement to cut Medicare and Medicaid prices to $245 a month next year for Novo's popular Nordisk GLP-1 drugs, marketed as Wegovy for weight loss and Ozempic for diabetes. According to experts, this level is unlikely to decrease during these negotiations.
The recent net Medicare price for Ozempic was $428 per month, according to an analysis published in the Journal of Managed Care and Specialty Pharmacy.
Other drugs up for price discussion this year include GSK's asthma and COPD inhaler Trelegy Ellipta and AbbVie's irritable bowel syndrome drug Linzess. The new prices will come into force in 2027.
Analysts said they would compare prices to recent net Medicare prices after accounting for confidential discounts and rebates. They will also compare them with prices negotiated by other high-income countries. It's a concept that President Donald Trump has fought for, sometimes called MFN pricing.
Medicare serves more than 67 million people age 65 and older and people with disabilities.
“These prices will fall below existing net prices. There will be some real savings,” said Sean Sullivan, a professor of pharmacy at the University of Washington, noting the importance of the public announcement.
“All other payers see them. What will stop them from asking manufacturers for the same price?” – he said.
PREVIOUS NEGOTIATIONS Saved 22%
Last year, Medicare released maximum new prices for the first 10 high-cost drugs agreed to under the Biden administration's Inflation Relief Act, which takes effect in 2026.
For those drugs, including drugs such as the Pfizer and Bristol Myers Squibb Eliquis blood thinners and Amgen's arthritis drug Enbrel, the new prices still average more than double and in some cases five times the prices negotiated by drugmakers in four other high-income countries.
Goldman Sachs estimates that the new prices for the first 10 drugs resulted in an average 22% discount compared to net Medicare prices at the time.
Under the IRA, Medicare is required to consider a number of factors in pricing, including manufacturer data and the availability of alternative treatments. The law does not include international price revisions in this process.
Until the passage of the IRA in 2022, U.S. law did not allow Medicare to negotiate drug prices, while many other countries have long had universal prescription drug coverage based on centralized price negotiations with manufacturers.
The Trump administration has since outlined what it considers “most favored nation” pricing terms: the lowest price in any country that is part of the Organization for Economic Co-operation and Development with a per capita gross domestic product of at least 60% of US GDP per capita.
In a separate pilot program, Medicare proposed a smaller “basket of countries” that included the six G7 countries: Britain, France, Germany, Italy, Canada and Japan, as well as Denmark and Switzerland. The benchmark used to calculate the RBN price will be the second lowest price in that basket of countries, adjusted by GDP per capita.
The pharmaceutical industry has fought hard to block Medicare negotiations, with several companies suing the government and warning they may have to shut down some drug development programs.
The next round of Medicare drug price negotiations is expected to include 15 more prescription and hospital drugs and begin in February.
(Reporting by Patrick Wingrove in New York and Dina Beasley in Los Angeles; Editing by Bill Berkrot)
