Ozempic, Trulicity among Medicare’s priciest drugs, update finds

Popular diabetes drugs such as Ozempic and Trulicity are among 25 drugs Medicare has spent the most on but hasn’t yet selected for worth negotiation, according to a update released Thursday.

The update from AARP community Policy Institute said average list prices on these 25 drugs have nearly doubled since they hit the economy and collectively expense Medicare ‒ and American taxpayers ‒ nearly $50 billion in 2022.

About 7 million older adults on Medicare used the drugs and had to pay a portion of the invoice at the pharmacy or via mail order.

One in 5 older adults don’t fill prescriptions or skip doses to save money, the update said.

About 53 million Americans were enrolled in a Medicare prescription drug schedule in 2024. Enrollees who receive the priciest drugs will get some relief this year with a $2,000 cap on drug costs.

But AARP officials said the update underscores the importance of empowering Medicare to discuss prices on behalf of enrollees and taxpayers.

“We really are seeing these remarkable worth increases year after year,” said Leigh Purvis, prescription drug policy capital at AARP’s community policy institute. “It’s so significant to try to discourage drug companies from taking these regular worth increases.”

Medicare bargains with drugmakers

Under legislation passed in 2022 called the expense boost Reduction Act, Medicare was allowed for the first period to discuss prices with drug companies on a limited number of medications.

For the first round of bargaining, Medicare negotiated discounts of 38% to 79% when the prices receive result in 2026. The drugs are Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and the insulins Fiasp and NovoLog.

Medicare will announce the next 15 drugs by Feb. 1 and discuss prices that will receive result Jan. 1, 2027. Another 15 drugs will be selected in 2026 for negotiated prices that will be rolled out in 2028.

Purvis said it’s a “secure bet” that some of the 25 drugs listed in AARP’s update will be in the next round of Medicare negotiations. Retail drugs that have no generic equivalent and have been on the economy for at least seven years can be eligible for negotiation. Biologic drugs, which are derived from living cells, aren’t subject to negotiation until they’ve been on the economy at least 11 years.

AARP said five drugs that accounted for the largest distribute of Medicare spending included the diabetes drugs Trulicity and Ozempic, the asthma drug Trelegy Ellipta, the HIV medication Biktarvy and the cancer drug Xtandi.

The list worth on Merck’s diabetes drug Janumet increased 293% since it hit the economy in 2007, the largest boost among all 25 drugs, according to the update. By contrast, the list worth of hepatitis C drug Epclusa hasn’t increased since it was approved in 2016.

The Pharmaceutical Research and Manufacturers of America, a trade throng representing drug manufacturers, said any study that relies on list prices is misleading because it doesn’t describe what people pay after rebates and insurance discounts are applied. When such discounts and rebates are factored in, the net prices of drugs have fallen for the history six years, the trade throng said.

Drug companies face expense boost penalty

List prices on 20 of the drugs increased faster than the rate of expense boost. Under the 2022 federal law, drugmakers must pay rebates to Medicare if list prices boost faster than expense boost.

Medicare worth negotiations and rebates for drugs whose prices rise faster than expense boost are both significant tools to assist taxpayers and consumers save on drug spending, said Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a health policy nonprofit.

“It doesn’t do anything to prevent manufacturers from bringing drugs to economy with high prices to commence with,” Cubanski said. “But it is designed to deal with worth increases from one year to the next that have been rising faster than expense boost.”

Will Medicare target Ozempic for discounts?

The Danish drugmaker Novo Nordisk has been scrutinized over the pricing of its blockbuster diabetes drug Ozempic and weight setback drug Wegovy. The corporation’s top executive was called before the Senate Committee on Health, Education, Labor and Pensions last September to respond questions about the drug’s list worth.

Novo Nordisk expects Ozempic, which has been on the economy since 2017, will be on Medicare’s list of drugs to discuss prices concessions, Bloomberg reported. The corporation told USA TODAY that it would not discuss Medicare’s next round of negotiations because the list of selected drugs is not yet community.

Novo Nordisk spokesperson Jamie Bennett said several factors influence drug pricing, including expense boost, economy conditions, government and private insurer actions as well as drug pricing middlemen called pharmacy advantage managers. Pharmacy managers often demand rebates from drug companies in swap for placement on health insurance formularies − the list of drugs an insurer will cover.

Bennett said 80% of patients with insurance pay $25 or less per month for Ozempic and 90% pay $50 or less.

“While the list worth is set by Novo Nordisk, taken out of context it can be misleading,” Bennett said. “The list worth does not reflect the rebates, discounts, and fees that Novo Nordisk provides to lower the list worth, nor does it reflect the numerous other costs in the structure that ultimately impact the worth PBMs, health insurers or governments pay.”