The Biden administration announced on Friday the selection of the next 15 prescription drugs that will undergo price negotiations between manufacturers and Medicare, three days before President-elect Donald Trump is set to take office and take over the program.
Danish pharmaceutical company Novo Nordisk’s revolutionary Type 2 diabetes medication Ozempic, obesity injection Wegovy, and diabetes pill Rybelsus are at the top of the list. The administration considers them one product since they all contain the same active ingredient, the GLP-1 semaglutide.
Other drugs selected include Linzess to treat irritable bowel syndrome and chronic constipation, Vraylar to treat schizophrenia and major depressive disorder, Otezla to treat plaque psoriasis, and several cancer treatment medications.
Mounjaro and Zepbound, the competitor diabetes and obesity products made by American pharmaceutical company Eli Lilly, were not selected for this round of drug price negotiations. Lilly’s drug Tradjenta and Merck’s drug Janumet, both of which also treat Type 2 diabetes, were among the other drugs selected, but neither is part of the GLP-1 drug class like Ozempic and Mounjaro.
The Medicare drug price negotiation program was established as part of President Joe Biden’s landmark domestic policy bill, the 2022 Inflation Reduction Act, which Democrats pointed to extensively during the 2024 presidential campaign as an achievement in lowering the costs of healthcare.
The act, which also contained hundreds of billions of dollars of subsidies for clean energy, restructured key aspects of the Medicare health insurance program for seniors over 65, including giving the Centers for Medicare and Medicaid Services the authority to negotiate prescription drug prices with manufacturers directly.
Critics of the program, including pharmaceutical investors and patient advocacy groups, argue the provisions of the Inflation Reduction Act create strong-arm measures that, in essence, require companies to capitulate to government-set prices since Medicare is the largest single prescription drug purchaser in the country.
Drugmakers face punitive taxation if they choose not to negotiate but still wish to participate in the Medicare program. Several pharmaceutical companies are in litigation against the Biden administration, making constitutional arguments against the Inflation Reduction Act.
The drug price negotiation announcement came earlier than anticipated, as the law required that CMS make the selection before Feb. 1. The proclamation is one of several sweeping healthcare announcements made in the last week of the Biden administration, including a controversial rule on cutting the legal limit of nicotine in tobacco products and banning Red Dye No. 3 because of its carcinogenic properties.
The incoming Republican trifecta is likely to attempt a repeal of the Medicare drug price negotiation program. Rep. Brett Guthrie (R-KY), the new chairman of the House Energy and Commerce Committee, which oversees Medicare, has expressed interest in revising or eliminating aspects of Biden’s pharmaceutical pricing agenda.
Sen. Ron Wyden (D-OR), the top Democrat on the Senate Finance Committee, which has jurisdiction over the Medicare program, called CMS’s announcement “a timely reminder of which party is working to bring down costs for American seniors and families.”
“Donald Trump spent his first four years as president talking a big game about standing up to Big Pharma with nothing to show for it,” Wyden said. “Democrats took action in less than two years to finally allow Medicare to use the bargaining power of millions of seniors to deliver lower drug prices.”
With Trump taking office on Monday, it is unclear whether his new administration could change the drugs subject to negotiation.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Trump’s nominees for health and human services secretary and CMS administrator, Robert F. Kennedy Jr. and Mehmet Oz, respectively, would have authority over the remainder of the negotiations process should they be confirmed by the Senate in the coming weeks.
Negotiated drug prices for this round of selected drugs would not take effect until 2027.