Making Sense of the CMS Drug Price Negotiation: What's Included and Why

Credit: Steve Buissinne from Pixabay

On January 17, 2025, the US Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced the next 15 drugs covered under the Medicare Part D price negotiations. Coming less than 18 months after the first 10 drugs included in the negotiations were announced in August 2023, this latest batch includes notable agents such as semaglutide (Ozempic; Rybelsus; Wegovy).

"Today, I’m proud to announce that my Administration has selected the next 15 drugs for Medicare drug price negotiation. The drugs treat conditions such as diabetes and cancer, and seniors across the country rely on them," said President Joe Biden, in an announcement. "These 15 drugs, together with the 10 drugs that Medicare already negotiated, represent about a third of Medicare Part D spending on prescription drugs, which means the lower prices my Inflation Reduction Act is delivering will put money back in seniors’ pockets across the country."

According to the HHS announcement, these 15 drugs accounted for approximately $41 billion in total gross covered drug costs from November 2023 to October 2024, which was roughly 14% of all spending during the period. When combined with the initial 10 announced in August 2023, the 25 drugs account for 1 in every 3 dollars spent on prescription drugs under Medicare Part D.

Why were these drugs chosen?

The 15 Part D drugs that will be selected for price negotiation for 2027 will be chosen from the top 50 negotiation-eligible Part D drugs with the highest total Medicare Part D expenditure. According to KFF, drugs will qualify for price negotiation for 2027 if they are covered under Medicare Part D, Medicare’s outpatient prescription drug benefit program, and are single source brand-name drugs or biological products without therapeutically-equivalent generic or biosimilar alternatives that are approved or licensed and marketed on a “bona fide” basis.

When will this go into effect?

According to information from the HHS, the negotiated prices for the 15 agents included in this round of negotiations will be reflected in 2027. Of note, the negotiated prices for the first 10 drugs included in the August 2023 announcement are scheduled to go into effect starting January 1, 2026.

Will there be more drugs selected?

As outlined in the Inflation Reduction Act, CMS will select up to 15 additional drugs for the third cycle of negotiation (including drugs covered under Part B and Part D), and up to 20 more drugs for each subsequent cycle.

15 Drugs Included in CMS Medicare Part D Price Negotiations

Semaglutide (Ozempic; Rybelsus; Wegovy)

Approved for type 2 diabetes in December 2017 as Ozempic, for oral use as Rybelsus in September 2019, and for chronic weight management as Wegovy in June 2021. Developed by Novo Nordisk, semaglutide is a GLP-1 receptor agonist.

Fluticasone Furoate, Umeclidinium, and Vilanterol Inhalation Powder (Trelegy Ellipta)

Trelegy Ellipta received FDA approval in September 2017 for COPD and was expanded to asthma in July 2020. This triple-therapy inhaler is a product of GlaxoSmithKline.

Enzalutamide (Xtandi)

Approved in August 2012 for metastatic castration-resistant prostate cancer, Xtandi was developed by Medivation in collaboration with Astellas Pharma.

Pomalidomide (Pomalyst)

Pomalyst was approved in February 2013 for relapsed or refractory multiple myeloma in patients who had received at least two prior therapies. It was developed by Celgene, now a part of Bristol Myers Squibb.

Palbociclib (Ibrance)

Ibrance was approved in February 2015 for HR-positive, HER2-negative advanced or metastatic breast cancer. This CDK4/6 inhibitor was developed by Pfizer.

Nintedanib (Ofev)

Ofev was initially approved in October 2014 for idiopathic pulmonary fibrosis, with later indications for ILDs with progressive phenotype and SSc-ILD. It was developed by Boehringer Ingelheim.

Linactolide (Linzess)

Linzess was approved in August 2012 for chronic idiopathic constipation and IBS-C in adults, with pediatric indications added in 2023. Developed by Ironwood Pharmaceuticals in collaboration with Allergan.

Acalabrutinib (Calquence)

Approved in October 2017 for mantle cell lymphoma, with later indications for chronic lymphocytic leukemia and small lymphocytic lymphoma. Developed by AstraZeneca, this is a second-generation BTK inhibitor.

Deutetrabenazine (Austedo; Austedo XR)

Approved in April 2017 for chorea associated with Huntington’s disease and later for tardive dyskinesia. Austedo is developed by Teva Pharmaceuticals.

Fluticasone Furoate / Vilanterol (Breo Ellipta)

Breo Ellipta was first approved in May 2013 for COPD and expanded to asthma treatment in 2015. Developed by GlaxoSmithKline.

Linagliptin (Tradjenta)

Approved in May 2011 for type 2 diabetes, Tradjenta is a DPP-4 inhibitor developed by Boehringer Ingelheim in partnership with Eli Lilly.

Rifaximin (Xifaxan)

Xifaxan was first approved in May 2004 for traveler’s diarrhea, followed by approvals for hepatic encephalopathy in 2010 and IBS-D in 2015. Developed by Salix Pharmaceuticals.

Cariprazine (Vraylar)

Approved in September 2015 for schizophrenia, Vraylar later received indications for bipolar I disorder and adjunctive treatment of major depressive disorder. Developed by Gedeon Richter in partnership with AbbVie.

Sitagliptin/Metformin (Janumet; Janumet XR)

Approved in March 2007, Janumet combines metformin and sitagliptin, addressing type 2 diabetes. It was developed by Merck & Co.

Apremilast (Otezla)

Otezla was approved in March 2014 for psoriatic arthritis, with plaque psoriasis added later that year. It was originally developed by Celgene, now under Amgen.