Government Price negotiations on Ozempic and Wegovy

GLP1 Receptor Agonists have certainly reached wide availability for older people first. Medicare and Medicaid have been covering Ozempic and Wegovy for awhile:

Senior citizens and GLP1 Receptor Agonists

GLP1 receptor agonists like Ozempic and Wegovy ease weight loss for senior citizens, but losing weight in old age is a delicate balance.

GLP1 GuideGLP1.Guide Staff

While it isn't easy for most of the rest of the USA to get coverage for GLP1s via insurance, it's particularly easy for those who some might agree most need it. Carrying less weight into old age is almost always a good idea.

Recently the AP reported that the government has started price negotiations for Ozempic and Wegovy:

Ozempic, Wegovy and other drugs are among 15 selected for Medicare’s price negotiations

The Biden administration says popular weight loss drugs like Ozempic and Wegovy have been added to Medicare’s list of medications that will be negotiated directly between the government and drug manufacturers.

AP NewsAMANDA SEITZ

This sounds like great news, as direct negotiations usually mean lower prices, and the US government has quite the negotiating leverage (along with an incoming administration that prides itself on making deals).

One thing that is often unstated but important to remember is that the government is negotiating these drugs because it is purchasing an enormous amount of them.

This speaks to the tremendous usage and popularity of GLP1s for older US citizens. There's a catch though – this actually won't affect prices in the short term.

Does this mean medicare covers Ozempic/Wegovy for weight loss?

No, Medicare is currently forbidden from covering drugs for weight loss. It seems unlikely that this will change under the incoming administration and RFK Jr. who has been somewhat adversarial towards Pharmaceutical companies in the past.

One of the outgoing administration's last acts was to introduce the possibility of medicare covering GLP1s for weight loss:

Biden proposes Medicare and Medicaid cover costly weight-loss drugs for millions of obese Americans

Millions of Americans would be eligible to have costly weight-loss drugs like Wegovy or Ozempic covered by Medicare or Medicaid under the rule.

AP NewsAMANDA SEITZ

There's an incredibly delicate balance here – thought RFK Jr. can be said to be generally against medication as the solution to health problems that could be solved with lifestyle changes, these medications are intensely popular, and being recommended quite widely to Americans young and old – with stellar results.

Another bring spot is that the effort behind the bill is bipartisan – both parties want this to happen (though they're a bit late in trying to make it happen):

The rule would not be finalized until January, days after Trump takes office. A bipartisan coalition of congressional members has lobbied for the drugs to be covered by Medicare, saying it could save the government from spending billions of dollars on treating chronic ailments that stem from obesity. While it’s unclear where Trump himself stands on coverage of the weight-loss drugs, his allies and Cabinet picks who have vowed to cut government spending could balk at the upfront price tag.

It might be counterintuitive but going against the idea of spending less money and enabling Medicare to purchase these medications could save enormous amounts in the future.

The AARP is behind the deployment of GLP1s for elderly patients

One important part to know is that on the side of GLP1s is the American Association of Retired Persons (AARP):

AARP - Wikipedia

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The AARP is a very active political actor, this means that

The AARP, one of the most powerful health care interest groups in Washington, said that it would fight any efforts to weaken the law in the GOP-controlled Congress.

One unanswered but inspiring question is the AARP's stance on having the drugs for weight loss as well as type 2 diabetes control. It may play a large factor in tipping the scales.

What does this mean for non-medicare/medicaid prices?

Unfortunately this may not do anything to affect prices for those purchasing GLP1s who aren't on medicare/medicaid in the short term.

One reason is that the prices won't take effect until 2027.

In the meantime, there just isn't enough competition in the marketplace. New generics have come online:

Another Generic Liraglutide launch: Hikma Phamaceuticals

A new player enters the generic GLP1 market - Hikma Pharmaceuticals. As the second generic Liraglutide provider, accessibility of GLP1s has never been better.

GLP1 GuideGLP1.Guide Staff

And some patent expirations are approaching:

Patent expirations for GLP1 Receptor Agonists

How long will we have to wait for generic versions of GLP1 drugs? We take a look at patent expiry dates for the most popular brands & GLP1 formulations.

GLP1 GuideGLP1.Guide Staff

But the sad truth is that at present the number of FDA approved GLP1s is still small, and it takes a lot of time to develop and test new medications.

Along with that, only a couple (Mounjaro and Zepbound) are approved for weight loss – and those are not yet on this list for negotiation.