Radar on Drug Benefits

The popular blockbuster diabetes and weight loss drugs — Ozempic and Wegovy — are among the 15 drugs selected for the second round of Medicare drug price negotiations as part of the Inflation Reduction Act, according to CMS. The negotiated prices will go into effect in 2027.

The 15 selected drugs were used by more than 5.2 million Medicare Part D beneficiaries and accounted for about $40.7 billion in total Medicare Part D gross spending between Nov. 1, 2023, and Oct. 31, 2024. Combined with the first 10 drugs already negotiated by Medicare, they represent over a third of total gross spending under Medicare Part D, CMS reported.

In one of its final days in office, Joe Biden’s administration announced the next 15 drugs selected for Medicare drug price negotiations. By June 1, 2025, CMS will submit the maximum fair price of each newly selected drug to the drug manufacturer, and the companies will have 30 days to respond to the initial offer by accepting it or providing a counteroffer.

For this second round of price negotiations authorized by the Inflation Reduction Act, CMS tweaked the rules guiding negotiations, offering manufacturers earlier meetings to discuss pricing offers and adding more opportunities for patients, advocacy groups and caregivers to provide input.

It is still unclear whether President Donald Trump will seek to stop the program or change the drugs selected.

Payers expect to face higher medication costs in the coming years with the increased adoption of GLP-1 agonists, cell and gene therapies, and other expensive drugs, according to Mary Beth Erwin, chief pharmacy officer at Blue Cross Blue Shield of Massachusetts. However, Erwin acknowledged during a recent webinar sponsored by the National Institute for Health Care Management (NIHCM) that traditional tools to manage costs are “increasingly the target of scrutiny and reform at all levels.”  

Erwin, who is responsible for BCBS of Massachusetts’ medication management strategies, mentioned that the insurer has implemented several ways to rein in costs, including formulary and utilization management “to ensure cost-effective and clinically appropriate access to medications while also maintaining quality of care.” 

Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Ron Wyden (D-Ore.) wrote a letter to President Donald Trump urging him to not pause the Medicare Drug Price Negotiation Program that is part of the Inflation Reduction Act. The letter, sent Jan. 21, noted news reports that suggested drug manufacturers will ask Trump to pause negotiations, the latest round of which includes the popular weight loss/diabetes drugs Ozempic and Wegovy (semaglutide). “You once said that ‘[d]eals are my art form. Other people paint beautifully or write poetry. I like making deals, preferably big deals.’ You should use those skills to cut drug prices and flat out reject any request to end negotiations from giant pharmaceutical makers that have spent decades putting profits over patients,” the senators wrote to Trump. 

The Dept. of Justice (DOJ) has sued Walgreens Boots Alliance, alleging the pharmacy chain illegally dispensed millions of opioid prescriptions and contributed to the opioid epidemic. The DOJ claims Walgreens, since August 2012, has filled opioid prescriptions that lacked legitimate purpose, were invalid or were not prescribed during normal professional practice — “clear red flags,” according to the complaint. Walgreens then sought reimbursement from Medicaid, Medicare and other federal programs in violation of the False Claims Act, the DOJ alleged. In December 2024, the DOJ filed a similar lawsuit against CVS. 

While federal legislators failed to act on the rising tide of anti-PBM sentiment in 2024, health policy experts are predicting that the risk of regulatory intervention will ramp up this year — even with Republicans, who traditionally are viewed as business friendly, controlling Congress and the White House. 

Yet some industry observers appear to be skeptical about how effective federal PBM reforms would be — especially because major PBMs will likely continue to see demand for their services while also embracing innovation.