Semaglutide is selected for Medicare drug price negotiation

The Department of Health and Human Services announced on January 17, 2025 that semaglutide is one of 15 drugs selected for the second round of Medicare drug price negotiations under the Inflation Reduction Act ^[3]. Medicare is treating Ozempic, Rybelsus and Wegovy as a single product because they share the same active ingredient ^[1]. Negotiations with participating manufacturers take place during 2025, and any negotiated prices take effect in 2027 ^[3].

The numbers behind the pick

Semaglutide topped the list on spending. Medicare Part D spent $14.43 billion on Ozempic, Rybelsus and Wegovy between November 1, 2023 and October 31, 2024, according to a CMS fact sheet, and nearly 2.3 million enrollees used those drugs during that window ^[1].

Across all 15 selected drugs, about 5.3 million Part D enrollees used them in that same period, accounting for roughly $41 billion, or about 14%, of total gross covered Part D drug costs ^[3]. Combined with the 10 drugs from the first negotiation cycle, the 25 products represent more than a third of Part D drug spending ^[3].

The other 14 selections include Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, Janumet and Otezla ^[3]. Drugs qualify after at least seven years on the market without generic competition, or 11 years for biologics ^[1].

The first round offers a rough benchmark. Medicare reached agreement on lower prices for all 10 drugs in cycle one, effective January 1, 2026, with discounts ranging from 38% to 79% off list prices ^[3]. CMS estimated those prices would have saved about $6 billion in net covered drug costs, roughly 22%, and projected $1.5 billion in aggregate out-of-pocket savings for enrollees in 2026 ^[3].

Drugmakers push back

Novo Nordisk said it opposes the negotiations and has "significant concerns" about how the law is being implemented, specifically criticizing the decision to combine products that "individually would not meet the requirements of the statute" ^[1]. The company said its lawsuit against the program is still pending ^[1]. PhRMA CEO Stephen Ubl called the negotiations "dangerous for millions of Americans who rely on innovative treatments" ^[1]. Industry lawsuits against the program have so far been unsuccessful ^[1].

Under the program rules, companies had until February 28, 2025 to decide whether to participate; those that decline face an excise tax of up to 95% of a drug's sales or removal of their products from the Medicare and Medicaid markets ^[2][3].

Why it matters for patients

A negotiated price would apply to Medicare Part D, not to commercial insurance or cash-pay purchases, and not until 2027 ^[3]. Nothing about this announcement changes what a person pays at the pharmacy in 2025 or 2026.

Coverage rules are separate from price. Medicare does not currently cover Wegovy for weight loss, but does cover the weekly injection for reducing the risk of cardiovascular events ^[1]. The Biden administration proposed in late 2024 to allow Medicare and Medicaid to cover obesity medications for weight loss; then-CMS Administrator Chiquita Brooks-LaSure said she hoped the incoming administration would finalize it, and that a final negotiated price for semaglutide would apply to all its branded products regardless of why they are prescribed ^[1]. Whether that proposal is finalized was not known at the time of the announcement.

Separately, a $2,000 annual cap on Part D out-of-pocket drug costs began in 2025. HHS analysts projected about 11 million Part D enrollees would hit the cap in 2025, saving a combined $7.2 billion, or roughly $600 per enrollee, with an average of about $1,100 for those who do not receive low-income assistance ^[3].

What happens next

CMS released the list more than two weeks ahead of the February 1 statutory deadline, which Brooks-LaSure said gives companies and patient groups more time to prepare ^[1]. Manufacturers faced a February 28, 2025 decision point on participating ^[3]. The negotiation period runs through November 2025, and agreed prices are scheduled to take effect in 2027 ^[1][3].

One open question is politics. The announcement came days before President-elect Donald Trump took office, and it is unclear whether the incoming administration will change how the program is run ^[1]. Brooks-LaSure said any revisions to the negotiation process would require Congress to change the law ^[1]. Future cycles will expand to include drugs covered under Medicare Part B, not just Part D ^[3].