By Patrick Wingrove and Deena Beasley
(Reuters) -The U.S. expects to announce lower prices for 15 of Medicare’s costliest drugs this week, a pivotal move for the program’s 67 million older and disabled Americans and for President Donald Trump’s push to align costs with other wealthy nations.
The government earlier this month unveiled a deal to next year slash to $245 a month the Medicare and Medicaid prices for Novo Nordisk’s popular GLP-1 drugs, sold as Wegovy for weight loss and Ozempic for diabetes — a level experts said was unlikely to go lower under the government’s negotiations.
An announcement is expected by Sunday.
Medicare’s recent net price for Ozempic was $428 a month, according to an analysis published in the Journal of Managed Care and Specialty Pharmacy.
Other drugs up for price negotiation this year include GSK’s asthma and COPD inhaler Trelegy Ellipta and AbbVie’s irritable bowel syndrome medicine Linzess. The new prices will take effect in 2027.
Analysts said they will be looking at how the prices compare to Medicare’s recent net prices after accounting for confidential rebates and discounts. They will also be comparing them to prices negotiated by other high-income countries, a concept Trump has fought for, sometimes referred to as most-favored-nation pricing.
Medicare covers more than 67 million people age 65 and over and those with disabilities.
“These prices are going to come down below the existing net prices. There will be some real savings,” said Sean Sullivan, professor of pharmacy at the University of Washington, who said the public announcement was important.
“All of the other payers can see them. What is going to stop them from asking manufacturers for that same price?” he said.
PREVIOUS NEGOTIATIONS SAVED 22%
The Medicare agency last year unveiled maximum new prices for the first 10 high-cost medicines negotiated under the Biden administration’s Inflation Reduction Act to take effect in 2026.
For those drugs, including medicines like the Pfizer and Bristol Myers Squibb blood thinner Eliquis and Amgen’s arthritis drug Enbrel, the new prices were still on average more than double, and in some cases five times, what drugmakers had agreed to in four other high-income countries.
Goldman Sachs estimated that the new prices for those first 10 drugs resulted in a 22% discount on average relative to Medicare’s net prices at the time.
Under the IRA, Medicare is required to consider a number of factors for pricing, including manufacturer data and availability of alternative treatments. The law does not include a review of international prices in the process.
Until passage of the IRA in 2022, U.S. law prevented Medicare from negotiating drug prices, while many other countries have long had universal prescription drug coverage that relies on centralized price negotiation with manufacturers.
The Trump administration has since outlined what it considers “most-favored-nation” pricing terms: the lowest price in any country that is part of the Organization for Economic Cooperation and Development with a gross domestic product per capita of at least 60% of U.S. GDP per capita.
Under a separate pilot program, Medicare has proposed a smaller “country basket,” which includes six G-7 countries: the UK, France, Germany, Italy, Canada and Japan, plus Denmark and Switzerland. The benchmark used to calculate the MFN price would be the second lowest price within that basket of countries, adjusted by GDP per capita.
The pharmaceutical industry had fought hard to block the Medicare negotiations, with several companies suing the government and warning that they may have to curtail some drug development programs.
Medicare’s next round of drug price talks are expected to include 15 further prescription and hospital-administered medicines and begin in February.
(Reporting by Patrick Wingrove in New York and Deena Beasley in Los Angeles; Editing by Bill Berkrot)
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