Danish drugmaker Novo Nordisk anticipates that its popular diabetes drug Ozempic may be included in the U.S. government's list of medications for price negotiations by 2027, according to a report from Bloomberg News on Tuesday (September 17).
The company believes this will be due to provisions in the Inflation Reduction Act (IRA) passed in 2022, which allows the U.S. Medicare program to negotiate prices for certain expensive drugs.
Ozempic Price Negotiations
Medicare, the federal health program, provides coverage to millions of Americans, including those aged 65 and older, as well as people with disabilities. Before the Inflation Reduction Act, Medicare could not negotiate drug prices, which left many prescription medications too costly for patients who depend on the program, according to Reuters.
The new law gives Medicare more power to negotiate and reduce the cost of drugs, helping people access the medicines they need at more affordable prices.
Ozempic is a once-weekly injection used to treat type 2 diabetes. It helps control blood sugar levels in patients, which can reduce the risks of serious complications like heart disease.
However, Ozempic has also gained popularity for another reason: it has shown the ability to help some people lose weight. Although it is not officially approved by the Food and Drug Administration (FDA) for weight loss, some doctors prescribe it "off-label" to help patients manage their weight.
The drug's price has been a point of discussion. While it is approved for diabetes treatment, it is often prescribed for weight loss, which many insurance companies don't cover.
The list price of Ozempic is around $968.52 per month, making it expensive for people without coverage. However, with certain insurance plans, the cost can be as low as $25 for up to 24 refills.
Ozempic's Inclusion in Medicare Price Talks Still Uncertain
Novo Nordisk spokesperson Jamie Bennett told Forbes that the company can't predict exactly when or if Ozempic will be included in Medicare's price negotiations. She also said that Novo Nordisk has concerns about how the Inflation Reduction Act is being carried out, but it will continue to work within the rules.
The Centers for Medicare & Medicaid Services (CMS) will release its next list of drugs that are up for price negotiations by February 1, 2025. The actual negotiation process will start on February 28, 2025, and finish by November 1, 2026. These negotiated prices are expected to take effect in early 2027, which is when Novo Nordisk expects Ozempic to be on the list.
Currently, there are 15 medications under consideration for price negotiations. Analysts on Wall Street also expect Ozempic to be included, especially given its high cost and the growing demand for it.
The high cost of Ozempic has attracted the attention of U.S. lawmakers. Senator Bernie Sanders, a well-known advocate for reducing prescription drug prices, has raised concerns about the high cost of Ozempic in the U.S. compared to other countries. He noted that in Canada, the drug costs much less, around $155 per month, compared to nearly $1,000 in the U.S.
Novo Nordisk has been under pressure to lower its prices. The company made almost $14 billion from Ozempic sales last year, accounting for 41% of its total revenue. Despite this, Novo Nordisk's shares saw a drop of 3.3% on Tuesday, closing at $132.32. However, the company's stock has still grown significantly this year, rising from $102.11 per share in January.
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