The Biden administration within days is expected to select the next batch of drugs that will be subject to Medicare price negotiations — a process that this time could include Novo Nordisk’s blockbusters Ozempic and Wegovy.
Why it matters: The political appeal of bringing down the price of the wildly popular drugs and other medicines for seniors could outweigh deep misgivings in Republican circles about one of Democrats’ most significant health policy achievements.
Where it stands: The list of 15 drugs up for negotiation this year has to be released by Feb. 1, but experts say it’s likely that Biden administration officials will do so before leaving office on Jan. 20.
- The prices that are hashed out over the coming year will take effect at the beginning of 2027.
- Novo Nordisk has acknowledged that its semaglutide products, including Ozempic and Wegovy, are targets.
- Medicare doesn’t yet cover them for weight loss, but prescriptions for diabetes and heart disease treatments still cost the program an estimated $7.5 billion in 2023.
- Last year’s inaugural negotiation process yielded lower prices for 10 widely used products, including popular blood thinners and diabetes drugs, that officials say will save seniors $1.5 billion next year.
Friction point: Trump and his picks to lead health care policy have been vocal about wanting to lower drug prices for Americans. But so far they’ve been largely noncommittal on the negotiations.
- Trump advisers have divided views on how hard to regulate the pharmaceutical industry, and those differences could seep into their stance on the path forward for the drug price talks.
- The dynamics make it hard to tell “whether the Trump administration will want to try to diminish the potential impact of this program, or … double down,” said Juliette Cubanski, deputy director of the program on Medicare policy at KFF.
- Adding to the uncertainty are ongoing legal challenges from the drug industry and possible moves in Congress to change the rules around the talks.
Between the lines: The Trump administration has to proceed with the process in basically the same manner as the Biden administration, unless Congress passes a new law overturning the negotiation policy or courts halt the process.
- Still, Trump’s Medicare officials could change some levers the government uses to determine the negotiated price and, for example, give more discretion to pharmaceutical companies.
Zoom in: Bringing down the price of highly popular weight-loss drugs that cost $1,000 or more per package could be appealing for the new administration, despite widespread opposition among GOP lawmakers who say having the government negotiate prices could stifle innovation.
- The Biden administration last month proposed having Medicare cover anti-obesity drugs, leaving the final decision on what’s sure to be a popular policy with voters up to the Trump administration.
- Having the government negotiate the price of Ozempic could make it easier for the Trump administration to follow through on the coverage policy, said Duane Wright, senior research analyst at Bloomberg LP.
What we’re watching: Whether Republicans in Congress get serious about repealing Medicare’s authority to negotiate drug prices.
- Sen. Mike Crapo, who now chairs the Senate Finance Committee, told Axios last year that he’d want to “remove and replace” the drug price negotiation policy if Republicans gained a majority in the Senate.
- But lawmakers now face other priorities and a lack of clarity around what would replace the policy.
- Legislation that gives drugs more time on the market before being subject to negotiations is more likely than outright repeal, Wright said.