By Michael Erman, Ahmed Aboulenein and Bhanvi Satija

(Reuters) -Novo Nordisk's blockbuster diabetes drug Ozempic and weight-loss treatment Wegovy are among the 15 drugs targeted for Medicare price negotiations for 2027, the U.S. government said on Friday.   

Other drugs on the list include Pfizer's cancer drugs Ibrance and Xtandi, GSK's asthma and chronic obstructive pulmonary disease (COPD) treatment Trelegy Ellipta, Teva's Huntington's disease treatment Austedo and Abbvie's irritable bowel syndrome drug Linzess.

The price negotiation process was established under President Biden's signature Inflation Reduction Act in 2022. The 15 new drugs are the second group of medications set to undergo the process and are among the most expensive for the Medicare health program for people aged 65 and older or with disabilities.

It's unclear if President-elect Donald Trump plans to make any changes to the program. Biden administration officials suggested he would be unable to do so because the law outlines detailed selection criteria.

"These 15 drugs, together with the 10 drugs that Medicare already negotiated, represent about a third of Medicare Part D spending on prescription drugs," Biden said in a statement.

Last year, the U.S. government negotiated price cuts that ranged from 38% to 79% for 10 highly popular prescription drugs used by Medicare, which will be effective in 2026.

Ge Bai, a professor of health policy and management at Johns Hopkins University and an advisor at conservative think tank Paragon Health Institute, said that she believes it is within the Trump adminsitration's power to change the list of drugs subject to negotiation.

"The IRA bestows the power of drug selection to the administration, not the past administration," Bai said in an email. "Drug negotiation is being highly scrutinized, and the initial evidence does not support it being an effective and valuable policy, which gives the Trump administration reasons to at least seek changes through executive actions."

NOVO TARGETED

Around 2.3 million Medicare patients used Novo drugs made with semaglutide - which includes Ozempic, Wegovy and Rybelsus - through its prescription drug plan program in the year ended October 2024, the government said. Total gross spending on all three topped $14 billion, it said.

Shares in Novo Nordisk were already down before the publication of the list due to new obesity data but fell further on the release and traded down 3.8%.

The Danish company did not immediately reply to a request for comment.

Since March, patients who use Wegovy for reasons in addition to weight loss - like reducing the risk of heart attack or stroke - have been covered in the Medicare program.

Government researchers predict that the use of diabetes drug Ozempic and Wegovy for weight loss would raise the U.S. deficit over the next 10 years at its current price. Novo has a list price of around $935 a month while Wegovy has a list price of around $1,350 a month, though the company says it offers discounts.

PHARMA COMPANIES DISLIKE LAW

The drug industry has fought the negotiation program, saying it will stifle innovation. They have been pushing the Trump administration to ease the new rules, asking for example to delay the timeline under which small molecule drugs become eligible for negotiation.

“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," Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Stephen J. Ubl said in a statement.

The announcement came just one day after the earliest possible date for doing so. The deadline for selecting the 15 drugs was Feb. 1 and makers of the selected drugs will have until Feb. 28 to decide if they will participate in the negotiations.

It is unclear if the pharmaceutical industry can influence Trump on changes to the program.

"CMS followed the process and they selected the 15 drugs that emerged from that process, and any team followed in the process again that is required by the statute, would end up with the same list of 15," an administration official said.

(Reporting by Michael Erman in New York, Ahmed Aboulenein in Washington and Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli and Nick Zieminski)