Ozempic and Wegovy Set for Medicare Price Talks

Novo Nordisk's Ozempic and Wegovy, among 15 drugs including Pfizer's Ibrance, will face Medicare price negotiations in 2027, as mandated by the Biden administration's Inflation Reduction Act. The negotiations aim to curb high costs for Medicare beneficiaries, but face opposition from pharmaceutical companies citing innovation concerns.

In a significant move aimed at reducing drug expenses, Novo Nordisk's renowned diabetes treatment Ozempic and weight-loss aid Wegovy are set to enter Medicare price negotiations by 2027. The decision, announced Friday, places them among 15 drugs targeted by the U.S. government for pricing discussions as part of a broader legal framework established under the Biden administration's Inflation Reduction Act in 2022.

This legislative initiative marks the second wave of cost-reduction efforts intended to make medicines affordable for Medicare beneficiaries, particularly impacting those over 65 or individuals with disabilities. Despite fervent opposition from pharmaceutical giants like Pfizer and AstraZeneca to the potential shifts in pricing, officials maintain that the current administration's legal footing makes reversing or amending the program's trajectory challenging.

Analysts note that the impact on Ozempic's sales, largely covered by private and Medicaid plans, may be minimal. Nonetheless, the pharmaceutical industry argues that such policies could hinder innovation, urging reconsideration of the approach. With the negotiation process set to culminate by the end of the year, the effectiveness of this strategy remains under scrutiny.

(With inputs from agencies.)