A pharmacist shows packing containers of Ozempic, a semaglutide injection drug used for treating sort 2 diabetes made by Novo Nordisk, at Rock Canyon Pharmacy in Provo, Utah, U.S. March 29, 2023.
George Frey | Reuters
Ozempic, the blockbuster diabetes remedy from Novo Nordisk, might be subsequent in line for worth negotiations between producers and Medicare.
The Biden administration this week launched the primary 10 medicine that will likely be topic to these talks – a course of that goals to decrease the costs of medicines that Medicare Part D spends probably the most on. The modifications will take impact by 2026.
Ozempic will probably be eligible for negotiations by the point the following spherical of medication are chosen in 2025, for worth modifications that may go into impact in 2027.
Several analysts count on the weekly injection to be a best choice as a result of Medicare Part D already spent greater than $2 billion on the drug in 2021 — an quantity near among the medicines chosen for worth talks this week. Total Part D spending in 2021 was $98 billion.
They assume that Medicare will spend a terrific deal on Ozempic within the coming years, given the fervent demand for the drug and comparable therapies that may assist sufferers shed undesirable kilos.
“Ozempic is going to be the biggest one that people are going to watch really closely in the second round of negotiations,” Cantor Fitzgerald analyst Louise Chen informed CNBC.
Novo Nordisk’s Rybelsus, a diabetes drug taken orally, is also on the record as a result of it incorporates the identical lively ingredient as Ozempic. Most Part D plans cowl each for sufferers with Type 2 diabetes, however don’t cowl the medicine for off-label makes use of like weight reduction.
Meanwhile, Novo Nordisk’s weight problems injection Wegovy, which makes use of that very same ingredient, probably will not be focused for negotiations within the close to time period as a result of Medicare would not cowl weight reduction medicine.
A spokesperson for Novo Nordisk did not immediately touch upon the potential for Ozempic to be included within the subsequent spherical of talks. They mentioned the corporate “supports policies to ensure patients can afford their medicines,” however criticized the negotiation course of.
“Unfortunately, we have seen CMS take aggressive steps to carry out unilateral price setting without consideration for the impact on patients living with chronic disease or the overall healthcare system,” the spokesperson mentioned.
Ozempic, Wegovy and Rybelsus are a part of a category of medication referred to as GLP-1s, which mimic a hormone produced within the intestine to suppress an individual’s urge for food.
Wegovy and Ozempic sparked a weight reduction trade gold rush final yr, with high-profile names like billionaire tech mogul Elon Musk amongst current customers. But the injections are expensive, as worth tags vary from round $900 to greater than $1,300 monthly.
Medicare and personal insurers usually safe reductions and rebates on the medicine they cowl, however it’s unclear how massive they’re.
Why Ozempic wasn’t eligible now
The Medicare program spent $2.6 billion on Ozempic in 2021, based on AARP analysis. Based on that quantity, AARP mentioned Ozempic was the tenth costliest drug coated by Medicare Part D.
But Ozempic wasn’t included within the first spherical of negotiations as a result of federal authorities’s tips for choice.
They require medicine to have been available on the market for a minimum of seven years after their preliminary approval or licensing within the U.S., as of the date that the Biden administration publishes the record of merchandise chosen.
The Food and Drug Administration accepted Ozempic for diabetes in December 2017, making it ineligible for the preliminary spherical of medication unveiled this week. But Ozempic will probably be eligible for the following record of medicines that will likely be revealed in February 2025, Evercore ISI analyst Umer Raffat mentioned in a analysis be aware.
“This means Novo’s Ozempic (along with Rybelsus) could be on next year’s list,” he wrote.
Several analysts agree, citing the quantity Medicare spent on Ozempic in 2021. That locations the drug on the very prime of prediction lists for the second spherical of negotiations.
Slashing the value of Ozempic via negotiations may result in important financial savings for the Medicare program.
Medicare would save an estimated $1.3 billion if the value of Ozempic was diminished by 40%, based on analysis from Leerink Partners analyst David Risinger. Meanwhile, this system would solely save round $342 million if Rybelsus was minimize by the identical quantity.
It’s unclear how a lot sufferers pay out of pocket for Ozempic, which has an inventory worth of $936 monthly within the U.S. But a decrease negotiated worth of Ozempic will probably profit the roughly 28% Medicare beneficiaries who’ve diabetes.
Wegovy destiny is unsure
There’s nonetheless an opportunity that negotiations may have an effect on Wegovy, significantly if Medicare decides to start out protecting the injection and different weight reduction therapies earlier than the second spherical.
Analysts from Citigroup, in a be aware final week, mentioned that is probably as a result of current analysis demonstrated Wegovy’s coronary heart well being advantages.
Weight loss medicine are being assessed for his or her capacity to deal with situations like dementia and dependancy after a landmark research confirmed that Wegovy helped cut back the chance of coronary heart assaults and strokes.
Bloomberg | Bloomberg | Getty Images
Earlier this month, Novo Noridsk launched late-stage trial information exhibiting that Wegovy slashed the chance of great heart-related issues similar to coronary heart assaults or strokes by 20%.
The outcomes counsel Wegovy has important well being advantages past serving to sufferers drop some pounds, which may doubtlessly result in expanded use of the drug and elevated protection by insurers.
Other analysts say that financial savings from the primary spherical of medication may assist pave the way in which for Medicare to cowl Wegovy.
Four of the ten medicine chosen for negotiations price Medicare greater than $17 billion a yr earlier than any reductions or rebates. Lowering costs for these medicine may doubtlessly “free up” Medicare’s price range and make it simpler for this system to cowl in style GLP-1s like Wegovy, based on a be aware from Wells Fargo analyst Mohit Bansal.
Source: www.cnbc.com”