Medicare Negotiates Prices for 15 Essential Drugs

The Biden administration has announced that popular diabetes and weight-loss medications, Ozempic and Wegovy, will be included in the upcoming Medicare drug price negotiations, intended to lower costs for seniors. A total of 15 drugs have been selected, representing about 14% of Medicare Part D expenditures, which amounted to approximately $41 billion between November 2023 and October 2024. This initiative follows a 2022 law that lifted a long-standing ban on Medicare negotiating drug prices, with new prices expected to take effect in 2027. The first round of negotiations resulted in significant price reductions for 10 drugs, with discounts of 38% to 79%, benefiting Medicare beneficiaries by an estimated $1.5 billion. Although the pharmaceutical industry has expressed concerns that such policies could stifle innovation, officials assert that the program's trajectory is difficult to reverse. The negotiations aim to enhance affordability for approximately 5.3 million Medicare beneficiaries who rely on these medications.