Sitagliptin Phosphate

The IRA was introduced in 2022 and aims to curb inflation by allowing Medicare to negotiate prices and rebates for certain drugs. Credit: designer491 via Getty Images. The US government has unveiled 15 additional drugs that will be covered in the next round of Medicare Part D price negotiations under the Inflation Reduction Act (IRA). Among the drugs selected in this round are Novo Nordisk’s blockbuster weight loss medication semaglutide, sold as Ozempic and Wegovy, Pfizer’s breast cancer drug Ibrance (palbociclib), and Pfizer and Astellas’s cancer medicine Xtandi (enzalutamide), as well as treatments for asthma and other chronic conditions. Drug manufacturers have until 28 February 2025, to decide whether to participate in negotiations. After the negotiations with participating drug companies later this year, new prices will become effective in 2027. The potential inclusion of semaglutide was expected even before the list. This was given the amount of Medicare spending on the drug and this will likely have the most impact, says Cyrus Fan, a research analyst at GlobalData. The announcement was made on the last working day of the Biden administration as Donald J.Trump will be sworn in as the US President on 20 January. “With the incoming Trump administration, it is not clear if any changes will come for the IRA negotiations. Though, what we will likely see is more pushback from the pharma industry,” says Fan. From November 2023 to October 2024, approximately 5.3 million Medicare Part D beneficiaries used these drugs to treat conditions such as cancer, type 2 diabetes, and asthma, with these medications accounting for $41bn – or 14% – of gross covered prescription drug costs under the programme, according to the US Department of Health and Human Services (HHS). This marks the second cycle of negotiations under the IRA, building on the 2023 selection of ten drugs . When all drugs included in both cycles are taken together, they represent over a third of the total gross prescription drug costs under Medicare Part D. In future years, CMS plans to expand the programme further, selecting up to 15 drugs for the third cycle and up to 20 drugs in subsequent cycles. This will include drugs covered under both Medicare Part B and Part D, as outlined in the IRA. The IRA was introduced in 2022 and aims to curb inflation by allowing Medicare to negotiate prices and rebates for certain drugs. Industry critics have said the IRA has far-reaching implications for biotech and pharma companies , including reduced drug pricing for Medicare patients, diminished returns for investors, and altered business strategies. The pharma lobbying group Pharmaceutical Research and Manufacturers of America (PhRMA) was quick to issued a statement decrying the announcement. “The IRA price setting process is dangerous for millions of Americans who rely on innovative treatments and created unnecessary, costly bureaucracy. In rushing out this list in their final days, the Biden administration once again fails to address the true challenges facing seniors and Medicare.” The programme has faced sharp opposition from the pharmaceutical industry, which argues that the negotiation process amounts to government price-setting and violates the US Constitution . Nearly all manufacturers involved in the first round of negotiations filed lawsuits challenging the IRA, but federal courts have dismissed most of these cases, citing that participation in the programme is voluntary and companies can opt out of Medicare if they disagree with the terms. Several companies have appealed these rulings, continuing their efforts to block or modify the programme. The first cycle of negotiations, completed in 2023, achieved price reductions ranging from 38% to 79% for the selected drugs, including a 79% cut for MSD’s Januvia (sitagliptin) and a 76% reduction for Novo Nordisk’s branded insulin aspart products. However, several experts have said the true impact of these reductions remains uncertain due to the lack of transparency around existing rebates and discounts already negotiated by Medicare Part D plan providers.