Enlarge / Prescription drugs are displayed at NYC Discount Pharmacy in Manhattan on July 23, 2024. (credit: Getty | Spencer Platt)

In the first round of direct price negotiations between Medicare and drug manufacturers, prices for 10 expensive and commonly used drugs saw price cuts between 38 percent to 79 percent compared to their 2023 list prices, the White House and the US Department of Health and Human Services (HHS) announced Thursday. The new negotiated prices will take effect on January 1, 2026.

The 10 drugs that were up for negotiations are used to treat various conditions, from diabetes, psoriasis, blood clots, heart failure, and chronic kidney disease to blood cancers. About 9 million people with Medicare use at least one of the drugs on the list. In 2023, the 10 drugs accounted for $56.2 billion in total Medicare spending, or about 20 percent of total gross spending by Medicare Part D prescription drug coverage. But in 2018, spending on the 10 drugs was just about $20 billion, increasing to 46 billion in 2022—a 134 percent rise. In 2022, Medicare enrollees collectively paid $3.4 billion in out-of-pocket costs for these drugs.

The 10 drugs as well as their use, 2023 costs, negotiated prices, and savings. (credit: HHS)

For now, it's unclear how much the newly set prices will actually save those who have Medicare enrollees in 2026. Overall costs and out-of-pocket costs will depend on each member's coverage plans and other drug spending. Additionally, in 2025, Medicare Part D enrollees will have their out-of-pocket drug costs capped at $2,000, which alone could significantly lower costs for some beneficiaries before the negotiated prices take effect.

Enlarge / Lars Fruergaard Jorgensen, chief executive officer Novo Nordisk A/S, during an interview at the company's headquarters in Bagsvaerd, Denmark, on Monday, June 12, 2023. (credit: Getty | Carsten Snejbjerg)

After some persuasion from Sen. Bernie Sanders (I-Vt.), the CEO of Novo Nordisk will testify before lawmakers later this year on the "outrageously high cost" of the company's diabetes and weight-loss drugs—Ozempic and Wegovy—in the US.

CEO Lars Jørgensen will appear before the Senate Committee on Health, Education, Labor, and Pensions (HELP), which is chaired by Sanders, in early September. The agreement came after a conversation with Sanders in which the CEO reportedly "reconsidered his position" and agreed to testify voluntarily. As such, Sanders has canceled a vote scheduled for June 18 on whether to subpoena Novo Nordisk to discuss its US prices, which are considerably higher than those of other countries.

The independent lawmaker has been working for months to pressure Novo Nordisk into lowering its prices and appearing before the committee. In April, Sanders sent Jørgensen a letter announcing an investigation into the prices and included a lengthy set of information requests. In May, the committee's investigation released a report suggesting that Novo Nordisk's current pricing threatens to "bankrupt our entire health care system."