HHS Expands Medicare Price Negotiations with 15 New Drugs Including Ozempic and Trelegy Ellipta

Key Insights

• The U.S. Department of Health and Human Services has selected 15 additional drugs for Medicare Part D price negotiations, targeting medications for diabetes, cancer, and asthma that account for $41 billion in Medicare spending.
• The selected medications include popular drugs like semaglutide (Ozempic), Trelegy Ellipta, and Xtandi, with negotiations set to begin in 2025 and negotiated prices taking effect in 2027.
• This second round of negotiations builds on the success of the first cycle, which achieved significant price reductions ranging from 38% to 79% on ten medications under the Inflation Reduction Act.

The U.S. Department of Health and Human Services (HHS) has announced its second round of Medicare drug price negotiations, targeting 15 additional medications under the Inflation Reduction Act. The selected drugs, which treat conditions ranging from type 2 diabetes to cancer and asthma, represented approximately $41 billion in Medicare Part D costs between November 2023 and October 2024.

"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," stated HHS Secretary Xavier Becerra. He emphasized that the initiative continues to advance the goal of providing innovative, life-saving treatments at reduced costs.

Selected Medications and Manufacturing Companies

The newly selected drugs for negotiation include several widely prescribed medications:

• Semaglutide (Ozempic, Rybelsus, Wegovy) from Novo Nordisk
• Trelegy Ellipta (fluticasone furoate, umeclidinium, and vilanterol) from GSK
• Xtandi (enzalutamide) from Astellas and Pfizer Oncology
• Ibrance (palbociclib) from Pfizer
• Calquence (acalabrutinib) from AstraZeneca

Negotiation Timeline and Process

Pharmaceutical companies have until February 28, 2025, to decide whether they will participate in the negotiations. The Centers for Medicare & Medicaid Services (CMS) will evaluate each drug's benefit to Medicare beneficiaries while considering research, development, production, and distribution costs. The negotiated prices will take effect in 2027.

Impact and Previous Negotiations

When combined with the initial ten drugs selected for negotiation, these medications represent over one-third of total gross covered prescription drug costs under Medicare Part D. The first round of negotiations demonstrated significant cost reductions, with discounts ranging from:

• 79% for sitagliptin (Januvia)
• 76% for insulin aspart (including Fiasp and NovoLog)
• 68% for dapagliflozin (Farxiga)
• 38% for ibrutinib (Imbruvica)

Future Expansion

CMS plans to continue expanding the program, with an additional 15 drugs to be selected for negotiation in the next cycle, including both Medicare Part B and Part D medications for 2028. Subsequent cycles will include up to 20 more drugs each, demonstrating the government's commitment to broader price reform in pharmaceutical spending.