Wegovy could face Medicare drug price negotiations next

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Good afternoon! Wegovy, the blockbuster weight loss treatment from Novo Nordisk, tops the list of drugs that could soon become part of the second round of price negotiations between manufacturers and Medicare. 

That’s according to a paper published last week in the Journal of Managed Care & Specialty Pharmacy. By February, the government will unveil the next 15 costliest Medicare Part D drugs that will be subject to the talks, for price changes that will go into effect in 2027. 

The Biden administration last month announced new negotiated prices for the first 10 Medicare Part D drugs selected for the talks. Those prices will take effect in 2026. 

Medications containing the same active ingredient and manufactured by the same company will be considered a single drug for the talks, according to guidance from the Centers for Medicare & Medicaid Services. The researchers said that’s why they expect all of Novo Nordisk’s three branded drugs containing semaglutide – Wegovy, the diabetes injection Ozempic and an older diabetes pill called Rybelsus – to be selected for the talks as a single product.

That may be a big deal for older adults who use those treatments, which each carry price tags of around $1,000 per month before insurance. However, it’s still unclear how much Medicare could negotiate down those costs — and how much patient costs would fall after insurance and rebates. 

The Biden administration, lawmakers and patient advocates have long criticized the Danish drugmaker for the high list prices of its obesity and diabetes drugs. Novo Nordisk’s CEO Lars Fruergaard Jørgensen faced a Senate grilling on Tuesday over those prices. 

While Jørgensen did not commit to lowering prices of Wegovy and Ozempic, he vowed to “collaborate” with pharmacy benefit managers “on anything that helps patients get access and affordability.” He also pushed back on Medicare price negotiations when asked about the potential selection of Wegovy and Ozempic, calling the talks “price-setting” that will have negative consequences for drug innovation.

Medicare Part D doesn’t cover weight loss treatments unless they are approved and prescribed for another health condition. But Wegovy could make the list for negotiations because it is now approved to reduce the risk of major cardiovascular complications, making it likely that some Part D plans have started covering the treatment, according to the researchers. 

Under CMS guidance, drugs must be on the market for at least seven years without generic competitors before Medicare can select them for price talks. Semaglutide will have been on the market for seven years and one month by February and does not have any generic equivalents.

Other researchers and Wall Street analysts have said they expect Ozempic to be subject to negotiations because of how much Medicare Part D spends on the treatment. 

The program spent more than $5.6 billion on semaglutide drugs in 2022, which only reflects spending on Ozempic and Rybelsus since Wegovy was not covered at the time, the paper said. Researchers also projected that Medicare Part D spent nearly $7.5 billion on Ozempic and Rybelsus in 2023, which is $3 billion higher than spending for the second-highest eligible drug. 

They noted they likely “underestimated” their projected spending figures for semaglutide

The other drugs expected to be subject to price talks include GSK‘s Trelegy Ellipta, a prescription inhaler used to treat asthma and chronic obstructive pulmonary disease, and Xtandi, a rheumatoid arthritis medication from Astellas Pharma. 

Still, researchers said the final list of drugs selected will depend on whether generic versions launch before February. 

We’ll be following the next round of Medicare drug price negotiations closely, so stay tuned for our coverage. 

Feel free to send any tips, suggestions, story ideas and data to Annika at [email protected].

Data startup Particle Health on Monday filed an antitrust lawsuit against Epic Systems, a software vendor that houses medical records for around 280 million patients in the U.S.

Particle alleges that Epic is using its dominance in the electronic health records space to stifle competition in other markets that use this data. The suit was filed in the Southern District of New York. 

Oracle and Meditech are other prominent companies in the electronic health records segment, and patients often have data stored across multiple vendors. Even so, Epic is a formidable competitor. The company commands the most acute care market share in the U.S., covering more than half all acute care multispecialty beds, according to a report from KLAS Research. Additionally, Epic was the only vendor that saw a net increase in this market share in 2023, the report said.  

Particle’s lawsuit comes after the two companies clashed over data-sharing practices earlier this year. Epic and Particle both belong to an interoperability network called Carequality, which helps facilitate a large-scale exchange of patient information.

Epic filed a formal dispute with Carequality in March, citing concerns that Particle and its participant organizations “might be inaccurately representing the purpose associated with their record retrievals.” To join the Carequality network, organizations must be approved and abide by “Permitted Purposes,” generally having to do with treatment, for the exchange of patient records.

In its 81-page complaint, Particle said Epic’s dispute was “manufactured” and that Epic asserted some Particle customers, not Particle itself, were obtaining records improperly. Particle said Epic used its “outsized influence” over Carequality to get a favorable outcome, and argues that it has suffered damages because of Epic’s conduct.

“Absent repercussions, Epic will be incentivized to run this playbook again the next time a competitor emerges,” Particle said in a release Monday.

Epic said it will “vigorously defend itself against Particle’s meritless claims,” and that it will continue to protect patients’ privacy.

“Particle’s claims are baseless. This lawsuit attempts to divert attention from the real issue: Particle’s unlawful actions on the Carequality health information exchange network violated HIPAA privacy regulations,” an Epic spokesperson told CNBC in a statement Tuesday. “Particle’s complaint mischaracterizes Carequality’s decision, which in fact proposes banning Particle customers that were accessing patient data for impermissible purposes.” 

It will likely be a while before there’s a definitive ruling, as antitrust cases often move slowly. Google, for instance, lost an antitrust case last month that was originally filed in 2020. A federal U.S. judge ruled that the company illegally held a monopoly over text advertising and search.

You can read the full Particle complaint against Epic here.

Feel free to send any tips, suggestions, story ideas and data to Ashley at [email protected].