Wegovy could face upcoming Medicare drug price negotiations

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Good afternoon! Wegovy, the highly successful slimming treatment from New Nordisktops the list of drugs that could soon be part of the second round of price negotiations between manufacturers and Medicare.

That's according to an article published last week in the Journal of Managed Care & Specialty Pharmacy. In February, the government will announce the next 15 most expensive Medicare Part D drugs that will be the subject of negotiations, for price changes that will take effect in 2027.

Last month, the Biden administration announced new negotiated prices for the first 10 Medicare Part D drugs selected for talks. Those prices will go into effect in 2026.

Under guidelines from the Centers for Medicare and Medicaid Services, drugs that contain the same active ingredient and are made by the same company will be considered a single drug for the discussions. The researchers said that's why they expect Novo Nordisk's three brand-name drugs that contain semaglutide — Wegovy, the diabetes injection Ozempic and an older diabetes pill called Rybelsus — will be selected for the discussions as a single product.

That could be a big win for seniors who use those treatments, each of which is priced at about $1,000 a month before insurance. But it's still unclear how much Medicare could reduce those costs, and how much the costs for patients would be reduced after insurance and reimbursements.

The Biden administration, lawmakers and patient advocates have long criticized the Danish drugmaker for high prices for its obesity and diabetes drugs. On Tuesday, Novo Nordisk CEO Lars Fruergaard Jørgensen was questioned by the Senate over those prices.

While Jørgensen did not commit to lowering prices for Wegovy and Ozempic, he did promise to “collaborate” with pharmacy benefit managers “on anything that helps patients gain 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 fixing” that will have negative consequences for pharmaceutical innovation.

Medicare Part D does not cover weight-loss treatments unless they are approved and prescribed for another medical condition. But Wegovy could make the cut because it is now approved to reduce the risk of major cardiovascular complications, so some Part D plans have likely begun covering the treatment, according to the researchers.

Under CMS guidelines, drugs must be on the market for at least seven years without generic competitors before Medicare can select them for price negotiations. Semaglutide will have been on the market for seven years and one month in February and has no generic equivalents.

Other researchers and Wall Street analysts have said they expect Ozempic to be the subject of negotiations because of what 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, as Wegovy was not covered at the time, according to the article. Researchers also projected that Medicare Part D spent nearly $7.5 billion on Ozempic and Rybelsus in 2023, which is $3 billion more than spending on the second-most eligible drug.

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

Other drugs expected to be the subject of price negotiations include: GSKAstellas Pharma's Trelegy Ellipta, a prescription inhaler used to treat asthma and chronic obstructive pulmonary disease, and Xtandi, a rheumatoid arthritis drug.

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

We will be closely monitoring the next round of Medicare drug price negotiations, so stay tuned for our coverage.

Feel free to send tips, advice, story ideas and information to Annika at [email protected].

Data startup Particle Health filed an antitrust lawsuit on Monday against Epic Systems, a software provider that stores medical records for about 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 notable players in the electronic medical records segment, and patients often have data stored across multiple vendors. Still, Epic is a formidable competitor. The company commands the largest acute care market share in the U.S., covering more than half of all multidisciplinary acute care beds, according to a report by KLAS Research. Additionally, Epic was the only vendor to see a net increase in this market share in 2023, according to the report.

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

In March, Epic filed a formal dispute with Carequality, raising concerns that Particle and its participating organizations “may be inaccurately representing the purpose associated with their record retrievals.” To join the Carequality network, organizations must be approved and meet “Permitted Purposes,” which typically relate to treatment, for sharing patient records.

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

“If there are no repercussions, Epic will have the incentive to reapply this strategy the next time a competitor emerges,” Particle said in a statement Monday.

Epic said it will “vigorously defend itself against Particle's unsubstantiated claims” and will continue to protect patient privacy.

“Particle's claims are without merit. This lawsuit attempts to divert attention from the real issue: Particle's unlawful actions on Carequality's health information exchange network violated HIPAA privacy rules,” an Epic spokesperson told CNBC in a statement Tuesday. “Particle's complaint mischaracterizes Carequality's decision, which in effect proposes to prohibit Particle's customers from accessing patient data for impermissible purposes.”

It will likely be a while before there is a final ruling, as antitrust cases typically move slowly. Google, for example, lost an antitrust case last month that had originally been filed in 2020. A U.S. federal judge ruled that the company illegally held a monopoly on advertising and text search.

You can read Particle’s full complaint against Epic here.

Feel free to send tips, advice, story ideas and information to Ashley at [email protected].