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Medicare says negotiated prices for 15 drugs to trim

spending by

36%

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New prices to take effect in 2027, aiming for savings

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Pharma industry opposes Medicare negotiations

(Rewrites with details of new prices in paragraphs 1-2)

By Patrick Wingrove and Deena Beasley

Nov 25 (Reuters) - The U.S. Medicare health plan said on

Tuesday that newly negotiated prices for 15 of its costliest

drugs will save 36% on those medications compared with recent

annual spending, or about $8.5 billion in net covered

prescription costs.

The prices go into effect in 2027, including a monthly

price of $274 for Novo Nordisk's popular GLP-1 drug

semaglutide, sold as Wegovy for weight loss and Ozempic for

diabetes.

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.

Analysts said they will be looking at how the prices compare

with Medicare's recent net prices after accounting for

confidential rebates and discounts. They will also be comparing

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

concept Trump has fought for, which is sometimes referred to as

most-favored-nation pricing.

Medicare covers more than 67 million people aged 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.

"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 such as 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 ( GS ) 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 negotiations 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 is expected to

include 15 additional prescription and hospital-administered

medicines and begin in February.