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Medicare announcement due by November 30

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New prices to take effect in 2027, aiming for savings

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Pharma industry opposes Medicare negotiations

By Patrick Wingrove and Deena Beasley

Nov 25 (Reuters) - The U.S. government is expected this

week to announce negotiated prices for 15 of the highest-cost

prescription drugs under its Medicare health plan, a potential

signal of the Trump administration's commitment to bring down

healthcare costs.

The government earlier this month unveiled a deal to next

year slash to $245 a month the Medicare and Medicaid prices for

Novo Nordisk's popular GLP-1 drugs, sold as Wegovy

for weight loss and Ozempic for diabetes -- a level experts said

is unlikely to move lower under these negotiations.

Medicare's recent net price for Ozempic was $428 a month,

according to an analysis published in the Journal of Managed

Care and Specialty Pharmacy.

Other drugs up for price negotiation this year include GSK's

asthma and COPD inhaler Trelegy Ellipta and AbbVie's ( ABBV )

irritable bowel syndrome medicine Linzess. The new

prices will take effect in 2027.

Analysts said they will be looking at how the prices compare

to Medicare's recent net prices after accounting for

confidential rebates and discounts. They will also be comparing

them to prices negotiated by other high-income countries, a

concept President Donald Trump has fought for, sometimes

referred to as most-favored-nation pricing.

Medicare covers more than 67 million people age 65 and over

and those with disabilities.

"These prices are going to come down below the existing net

prices. There will be some real savings," said Sean Sullivan,

professor of pharmacy at the University of Washington, who noted

the importance of a public announcement.

"All of the other payers can see them. What is going to stop

them from asking manufacturers for that same price?" he said.

PREVIOUS NEGOTIATIONS SAVED 22%

The Medicare agency last year unveiled maximum new prices

for the first 10 high-cost medicines negotiated under the Biden

administration's Inflation Reduction Act to take effect in 2026.

For those drugs, including medicines like the Pfizer ( PFE )

and Bristol Myers Squibb ( BMY ) blood thinner Eliquis and

Amgen's ( AMGN ) arthritis drug Enbrel, the new prices were

still on average more than double, and in some cases five times,

what drugmakers had agreed to in four other high-income

countries.

Goldman Sachs estimated that the new prices for those first

10 drugs resulted in a 22% discount on average relative to

Medicare's net prices at the time.

Under the IRA, Medicare is required to consider a number of

factors for pricing, including manufacturer data and

availability of alternative treatments. The law does not include

a review of international prices in the process.

Until passage of the IRA in 2022, U.S. law prevented

Medicare from negotiating drug prices, while many other

countries have long had universal prescription drug coverage

that relies on centralized price negotiation with

manufacturers.

The Trump administration has since outlined what it

considers "most-favored-nation" pricing terms: the lowest price

in any country that is part of the Organization for Economic

Cooperation and Development with a gross domestic product per

capita of at least 60% of U.S. GDP per capita.

Under a separate pilot program, Medicare has proposed a

smaller "country basket," which includes six G-7 countries: the

UK, France, Germany, Italy, Canada and Japan, plus Denmark and

Switzerland. The benchmark used to calculate the MFN price would

be the second lowest price within that basket of countries,

adjusted by GDP per capita.

The pharmaceutical industry had fought hard to block the

Medicare negotiations, with several companies suing the

government and warning that they may have to curtail some drug

development programs.

Medicare's next round of drug price talks are expected to

include 15 further prescription and hospital-administered

medicines and begin in February.