Published by Global Banking & Finance Review®
Posted on January 18, 2025
5 min readLast updated: January 27, 2026
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Novo Nordisk's Ozempic and Wegovy are among 15 drugs selected for Medicare price negotiations under the Inflation Reduction Act, affecting future drug pricing.
By Michael Erman, Ahmed Aboulenein and Bhanvi Satija
(Reuters) -Novo Nordisk's blockbuster diabetes drug Ozempic and weight-loss treatment Wegovy are among the 15 drugs targeted for Medicare price negotiations for 2027, the U.S. government said on Friday, part of a law pharmaceutical companies have pledged to revisit with the Trump administration.
Other drugs on the list include Pfizer's cancer drugs Ibrance and Xtandi, GSK's asthma and chronic obstructive pulmonary disease (COPD) treatment Trelegy Ellipta, Teva's Huntington's disease treatment Austedo and Abbvie's irritable bowel syndrome drug Linzess.
The price negotiation process was established under President Biden's signature Inflation Reduction Act (IRA) in 2022. The 15 new drugs are the second group of medications set to undergo the process and are among the most expensive for the Medicare health program for people aged 65 and older or with disabilities.
It's unclear if President-elect Donald Trump plans to make any changes to the program. Biden administration officials suggested he would be unable to do so because the law outlines detailed selection criteria.
"These 15 drugs, together with the 10 drugs that Medicare already negotiated, represent about a third of Medicare Part D spending on prescription drugs," Biden said in a statement.
Last year, the U.S. government negotiated price cuts that ranged from 38% to 79% for 10 highly popular prescription drugs used by Medicare, which will be effective in 2026.
Ge Bai, a professor of health policy and management at Johns Hopkins University and an advisor at conservative think tank Paragon Health Institute, said the Trump administration has the right to change the drugs subject to negotiation.
"The IRA bestows the power of drug selection to the administration, not the past administration," Bai said in an email. "Drug negotiation is being highly scrutinized, and the initial evidence does not support it being an effective and valuable policy, which gives the Trump administration reasons to at least seek changes through executive actions."
NOVO TARGETED
Around 2.3 million Medicare patients used Novo drugs made with semaglutide - which includes Ozempic, Wegovy and Rybelsus - through its prescription drug plan program in the year ended October 2024, the government said. Total gross spending on all three topped $14 billion, it said.
Shares in Novo Nordisk were already down before the publication of the list due to new obesity data but fell further on the release and traded down 4.6%.
"Novo Nordisk remains opposed to government price setting through the IRA and has significant concerns about how the law is being implemented by this administration," the company said in a statement.
"However ... we will work with the incoming administration to deliver meaningful solutions for patients," it added.
Since March, Wegovy use for reasons in addition to weight loss - like reducing the risk of heart attack or stroke - has been covered in the Medicare program.
Government researchers predict that the use of diabetes drug Ozempic and Wegovy for weight loss would raise the U.S. deficit over the next 10 years at its current price. Ozempic has a list price of around $935 a month while Wegovy has a list price of around $1,350 a month, though the company says it offers discounts.
Drugmakers Bristol Myers, Pfizer and others whose medicines are on the list said they did not believe price negotiations could resolve barriers to access for patients.
AstraZeneca said in a statement that it will urge the government to reconsider its decision to include its cancer drug Calquence on the list. Merck and Amgen did not respond to a request for comment.
Wall Street analysts said Ozempic and Wegovy's inclusion on the list wasn't surprising.
TD Cowen analyst Michael Nedelcovych said the sales impact to Wegovy would probably be minimal because most prescriptions are covered by private health plans and the Medicaid program for people with low incomes.
PHARMA COMPANIES DISLIKE LAW
The drug industry has fought the negotiation program, saying it will stifle innovation. They have been pushing the incoming Trump administration to ease the rules, asking, for example, to delay the timeline under which small molecule drugs become eligible for negotiation.
“The IRA price setting process is dangerous for millions of Americans who rely on innovative treatments and created unnecessary, costly bureaucracy. In rushing out this list in their final days, the Biden administration once again fails to address the true challenges facing seniors and Medicare," Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Stephen J. Ubl said in a statement.
The announcement came just one day after the earliest possible date for doing so. The deadline for selecting the 15 drugs was Feb. 1 and makers of the selected drugs will have until Feb. 28 to decide if they will participate in the negotiations.
Negotiations are due to take place through Nov. 1 of this year and the government will set prices by the end of that month.
It is unclear if the pharmaceutical industry can influence Trump on changes to the program.
"The drug list is a nice mix of chronic disease, preferred branded drugs, which will impact a lot of beneficiaries," said Stacie Dusetzina, professor of health policy at Nashville's Vanderbilt University.
Dusetzina said that the law mandates that a minimum discount of at least 25% must be applied, and that could result in savings even if the Trump administration is "less aggressive" during the negotiations.
(Reporting by Michael Erman in New York, Ahmed Aboulenein in Washington; Bhanvi Satija, Manas Mishra and Christy Santhosh in Bengaluru; Stine Jacobsen in Copenhagen; Editing by Shinjini Ganguli, Caroline Humer and Nick Zieminski)
The article discusses Medicare's selection of Novo Nordisk's drugs, Ozempic and Wegovy, for price negotiations.
They are part of the Inflation Reduction Act's effort to reduce drug costs for Medicare.
Novo Nordisk opposes government price setting but plans to work with the incoming administration.
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