US slashes 36% off Medicare spending on 15 high-priced medicines

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By Patrick Wingrove and Deena Beasley The U.S. Medicare health plan said on Tuesday that newly negotiated prices for 15 of its costliest drugs will save 36% on those medications compared with recent annual spending, or about $8.5 billion in net covered prescription costs.The prices go into effect in 2027, including a monthly price of $274 for Novo Nordisk's OMXCOP:NOVO_B popular GLP-1 drug semaglutide, sold as Wegovy for weight loss and Ozempic for diabetes.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. Medicare put the drug's list price, before confidential rebates and discounts, at $959 a month.Based on such nondiscounted list prices, Medicare said savings on the 15 drugs ranged from 38% to 85%. "They were gonna go to the table and try and push on those prices, and that's what they did," said William Padula, professor of pharmaceutical and health economics at the University of Southern California.AstraZeneca’s LSE:AZN leukemia drug Calquence, Boehringer’s lung treatment Ofev and Pfizer’s NYSE:PFE breast cancer drug Ibrance took the biggest hits from this round of Medicare negotiations, each slashed by over $4,000 from estimated net prices.The annual price negotiations were established under President Joe Biden's signature Inflation Reduction Act (IRA) of 2022. Previously, Medicare was barred by law from negotiating with drugmakers.SAVINGS OUTPACE PREVIOUS YEAR'SThe projected 2027 savings of 36% is better than the 22% savings of net spending - according to an estimate from Goldman Sachs - that Medicare achieved with last year's first round of price negotiations for 10 different drugs."They are getting more efficient with their methodology," but this latest batch of newer products likely had "more wiggle room" on price, Padula said.Additional drugs up for negotiation this year included GSK's LSE:GSK asthma and COPD inhaler Trelegy Ellipta, which will have a price of $175 versus its list price of $654. AbbVie's NYSE:ABBV irritable bowel syndrome medicine Linzess has a new price of $136, down from $539.Analysts said they will also be comparing the new prices to prices negotiated by other high-income countries, a concept President Donald Trump has fought for, which is sometimes referred to as most-favored-nation pricing, or MFN. The pharmaceutical industry ha...

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