Novo Nordisk A/S's
Ozempic is poised to become eligible for negotiations when the next batch of drugs is chosen in 2025, leading to price adjustments taking effect in 2027.
Citing the analysts, CNBC notes that Ozempic, given its extensive usage in 2021, where Medicare Part D expended over $2 billion on the drug, will be a prominent contender in these negotiations.
This spending amount is comparable to some of the medications currently under consideration for price discussions this week, out of a total Part D expenditure of $98 billion in 2021.
Furthermore, Novo Nordisk's Rybelsus, an orally administered diabetes drug that shares the same active ingredient as Ozempic, may also be included in the negotiation list since most Part D plans cover both drugs for patients with Type 2 diabetes, albeit not for off-label uses like weight loss.
Conversely, Novo Nordisk's obesity injection, Wegovy, which utilizes the same ingredient, is less likely to be subject to negotiations in the near term due to Medicare's exclusion of weight loss drugs from its coverage.
Ozempic, Wegovy, and Rybelsus have generated significant interest in the weight loss industry, with prominent individuals like tech mogul Elon Musk among recent users, they come at a considerable cost, ranging from approximately $900 to over $1,300 per month.
Reducing the price of Ozempic through negotiations could yield substantial savings for the Medicare program. Estimates suggest that Medicare could save approximately $1.3 billion if Ozempic's price were reduced by 40%, while the savings for Rybelsus under the same conditions would be around $342 million.
A lower negotiated price for Ozempic is likely to benefit the approximately 28% of Medicare beneficiaries with diabetes. There is also a possibility that negotiations could impact Wegovy, particularly if Medicare decides to include the injection and other weight loss treatments before the second round.
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