Headlined by Ozempic, Medicare Reveals Second Round of Drugs Selected for Price Negotiations

Building off the momentum of the first round of 10 prescription drugs1 for individuals with Medicare Care Part D, the Centers for Medicare & Medicaid Services (CMS) revealed its choices for the 15 latest drugs to be covered under this plan for price negotiations.2

As stated in the Inflation Reduction Act (IRA)—which provides Medicare with the right to directly negotiate with drug companies as a way to improve access to various brand name Part B and D drugs—the first round of negotiated prices (announced back in August 2024) will go into effect Jan. 1, 2026, while the second round’s negotiated prices will become effective in 2027.

The most recent drugs on the list, along with their approved indications, include:

1. Ozempic, Rybelsus, and Wegovy (type 2 diabetes, weight loss)
2. Trelegy Ellipta (asthma and COPD in adults)
3. Xtandi (prostate cancer)
4. Pomalyst (multiple myeloma, AIDS-related Kaposi sarcoma)
5. Ibrance (breast cancer)
6. Ofev (chronic lung disease in adults)
7. Linzess (irritable bowel syndrome, chronic constipation)
8. Calquence (adults with chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL), and mantle cell lymphoma (MCL) who have received at least one prior therapy)
9. Austedo; Austedo XR (Tardive dyskinesia, Huntingdon’s disease)
10. Breo Ellipta (asthma)
11. Tradjenta (type 2 diabetes)
12. Xifaxan (overt hepatic encephalopathy recurrence in adults, irritable bowel syndrome with diarrhea)
13. Vraylar (antipsychotic)
14. Janumet; Janumet XR (type 2 diabetes)
15. Otezla (plaque psoriasis, psoriatic arthritis, and oral ulcers)

The drug companies with a selected drug will have until Feb. 28, 2025 to decide if they will participate in negotiations.

“Last year, we proved that negotiating for lower drug prices works. Now we plan to build on that record by negotiating for lower prices for 15 additional important drugs for seniors,” said HHS Secretary Xavier Becerra. “Today’s announcement is pivotal – the Inflation Reduction Act is lowering prices for people on Medicare. HHS [US Department of Health and Human Services] will continue negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs.”

According to the HHS, Between November 2023 and October 2024, about 5.3 million people with Medicare Part D coverage used these drugs for treating various conditions, such as cancer, type 2 diabetes, and asthma, which represented approximately $41 billion in total gross covered prescription drug costs under Medicare Part D (about 14%) during that timeframe.

If one also combines those numbers with the total gross covered prescription drug costs of the 10 drugs in the first round of negotiations during the same time, it reportedly represents over a third of total gross covered prescription drug costs under Medicare Part e D.

Looking ahead, the IRA outlines that 15 more drugs will be selected for third cycle round of negotiations in 2026 (including drugs covered under Part B and Part D), and as many as 20 drugs every year following).

References

1. Saraceno N. Medicare Unveils Results of First-Round Drug Price Negotiations. Pharmaceutical Commerce. August 16, 2024. Accessed January 17, 2025. https://www.pharmaceuticalcommerce.com/view/medicare-drug-price-negotiations

2. HHS Announces 15 Additional Drugs Selected for Medicare Drug Price Negotiations in Continued Effort to Lower Prescription Drug Costs for Seniors. US Department of Health and Human Services. January 17, 2025. Accessed January 17, 2024. https://www.cms.gov/newsroom/press-releases/hhs-announces-15-additional-drugs-selected-medicare-drug-price-negotiations-continued-effort-lower