Semaglutide selected for second round of Medicare drug price talks

The Biden administration on Jan. 17 selected semaglutide — the active ingredient in Ozempic, Wegovy and Rybelsus — as one of 15 drugs for the second round of Medicare drug price negotiations ^[1][3]. The negotiations will happen during 2025, and any agreed prices would take effect Jan. 1, 2027 ^[3].

Semaglutide is listed as a single product because the three brand-name medicines share the same active ingredient ^[1]. Novo Nordisk makes all three ^[1].

The spending numbers

Among the 15 selected drugs, Medicare Part D spent the most on semaglutide products: $14.43 billion in gross covered prescription drug costs between Nov. 1, 2023, and Oct. 31, 2024, according to a CMS fact sheet ^[1]. Nearly 2.3 million Medicare enrollees used those drugs in that period ^[1].

All 15 drugs together accounted for about $41 billion, or roughly 14%, of total Part D gross prescription drug costs in that window, and about 5.3 million people with Part D coverage used them ^[1][3]. Other large line items included Trelegy Ellipta at about $5.14 billion (1.3 million enrollees) and Xtandi at $3.16 billion (35,000 enrollees) ^[1]. Pomalyst cost $2.07 billion for 14,000 enrollees, and Otezla was the smallest at $995 million for 31,000 enrollees ^[1].

Combined with the 10 drugs selected in the first round, the 25 products represent 36% of Part D prescription drug costs during that period, or more than a third ^[1][2][3].

Deadlines and pushback

Drug companies with a selected drug have until Feb. 28, 2025, to decide whether to participate in negotiations ^[2][3]. Companies that decline face a 95% excise tax on the drug's sales or removal of the product from Medicare and Medicaid markets ^[2].

Novo Nordisk said it opposes the negotiations and has "significant concerns" about how the law is being carried out, specifically criticizing the decision to combine Ozempic, Rybelsus and Wegovy into one product ^[1]. The company said its lawsuit against the program is still pending ^[1].

The industry lobbying group PhRMA said the negotiations are "dangerous for millions of Americans who rely on innovative treatments" and objected to what it calls a "pill penalty" that targets pills sooner than other medicines ^[1]. AARP supported the announcement, with its chief advocacy and engagement officer, Nancy LeaMond, saying the first round "made it clear that this process will reduce the prices of these important products" ^[1].

CMS Administrator Chiquita Brooks-LaSure said the Biden administration carried out the law as written and added, "I hope that the incoming administration does the same" ^[1]. She said any revisions to the process would require Congress to change the law ^[1]. It is not yet known whether President-elect Donald Trump will try to change or scale back parts of the law ^[1].

Why it matters for patients

Nothing about what people pay today changes because of this announcement. The negotiated prices, if reached, would not begin until January 2027 ^[3], and the amounts have not been announced. CMS has said the negotiation period ends in November ^[1].

Medicare does not currently cover Wegovy for weight loss, though it does cover the weekly injection to reduce the risk of cardiovascular events ^[1]. The Biden administration proposed in late 2024 letting Medicare and Medicaid cover obesity medications for weight loss, and Brooks-LaSure said she hopes the next administration finalizes that proposal ^[1]. If it does, the negotiated semaglutide price would apply to all of its branded products regardless of why they are prescribed, she said ^[1].

Separately, the Inflation Reduction Act's $2,000 annual cap on Part D out-of-pocket drug costs applies in 2025. About 11 million Part D enrollees are expected to hit that cap and save a combined $7.2 billion, or about $600 per enrollee, according to federal estimates ^[3].

What happens next

Feb. 28, 2025 is the deadline for manufacturers to agree to participate in this round ^[3]. Negotiations continue through 2025, with prices effective Jan. 1, 2027 ^[3]. The first round of negotiations, covering 10 drugs, produced prices effective Jan. 1, 2026, with discounts of 38% to 79% off list prices; the government expects $1.5 billion in enrollee out-of-pocket savings and about $6 billion in net Medicare savings in 2026 ^[1][3]. A third cycle, adding drugs covered under Medicare Part B, would take effect in 2028 ^[2][3].