Darwin's Our Take: Botox, Trulicity, Xolair among drugs selected for next round of Medicare price negotiations

CMS released a list of 15 drugs to be included in the third cycle of price negotiations under the Inflation Reduction Act of 2022.

The agency will negotiate with manufacturers this year on how much Medicare will pay for the following drugs, and those prices will go into effect on Jan. 1, 2028.

• GSK’s Anoro Ellipta (umeclidinium/vilanterol), indicated for chronic obstructive pulmonary disorder
• Gilead Sciences’ Biktarvy (bictegravir/emtricitabine/tenofovir alafenamide), indicated for HIV-1 infection
• AbbVie’s Botox and Botox Cosmetic (onabotulinumtoxinA), for therapeutic indications such as migraines, bladder dysfunction, and muscle spasms (Medicare does not cover Botox for cosmetic purposes.)
• UCB’s Cimzia (certolizumab pegol), indicated for Crohn’s disease, rheumatoid arthritis, and other autoimmune diseases
• Novartis Pharmaceuticals’ Cosentyx (secukinumab), indicated for plaque psoriasis and rheumatic diseases
• Takeda Pharmaceuticals’ Entyvio (vedolizumab), indicated for Crohn’s disease and ulcerative colitis
• Johnson & Johnson’s Erleada (apalutamide), indicated for prostate cancer
• Novartis Pharmaceuticals’ Kisqali (ribociclib), indicated for breast cancer
• Eisai’s Lenvima (lenvatinib), indicated for thyroid, renal cell, hepatocellular, and endometrial cancers
• Bristol Myers Squibb’s Orencia (abatacept), indicated for rheumatoid arthritis and other autoimmune conditions
• Otsuka and Lundbeck’s Rexulti (brexpiprazole), an antipsychotic indicated for major depressive disorder, schizophrenia, and agitation associated with Alzheimer’s disease
• Eli Lilly’s Trulicity (dulaglutide), indicated for type 2 diabetes
• Eli Lilly’s Verzenio (abemaciclib), indicated for breast cancer
• Pfizer’s Xeljanz (tofacitinib) and Xeljanz XR, indicated for rheumatoid arthritis, ulcerative colitis, and other autoimmune diseases
• Genentech and Novartis Pharmaceuticals’ Xolair (omalizumab), indicated for allergies, asthma, and other indications

Additional information about how these drugs were chosen is available in this CMS fact sheet. The agency said this year’s list includes, for the first time, drugs that fall under Medicare Part B.

CMS said it will also renegotiate the price of Boehringer Ingelheim’s type 2 diabetes drug Tradjenta (linagliptin), which was included last year in the second round of Medicare price negotiations.

The agency noted that manufacturers have until Feb. 28, 2026, to decide whether they will participate in negotiations.

In addition, CMS released a list of 50 negotiation-eligible drugs based on combined expenditures under Medicare Parts B and D from November 2025 through October 2025. The 15 drugs targeted for this year’s price negotiations are at the top of that list.

According to CMS, these 15 drugs accounted for approximately $27 billion in total prescription drug spending under Medicare Part B and D during that period, representing approximately 6% of total spending for Part B and D. Trulicity was at the top of the list, with total Part B and D expenditures of $4.9 billion.

OUR TAKE: For manufacturers, the financial impact of price cuts on the drugs in this new round of negotiations will likely be minimal, MedCity News reported, because most of the drugs are old enough to be facing patent expiry within the next few years.  

An exception is Gilead’s HIV drug Biktarvy, which was approved in 2018. In a note to investors, David Risinger, an analyst with Leerink Partners, singled out Biktarvy as the only drug on the list with “Medicare exposure” that is material to its manufacturer’s sales, MedCity News reported. Risinger said Biktarvy’s revenue from Medicare will account for approximately 8% of Gilead’s estimated global revenue in 2027.

Medicare exposure for the other drugs on the list will account for 0% to 3% of their manufacturers’ projected 2027 revenue, according to Leerink’s calculations.  

As multiple news outlets pointed out, two drugs that would’ve had considerably greater impact on their manufacturers’ revenue, Merck’s Keytruda (pembrolizumab) and Bristol Myers Squibb’s Opdivo (nivolumab), both blockbuster cancer immunotherapies, were not included on this year’s list — as had previously been anticipated.

Price negotiations for Keytruda and Opdivo were pushed back due to provisions in last summer’s One Big Beautiful Bill Act. Both drugs will face competition from biosimilars starting in 2028, which will lower their prices even without Medicare negotiations.

What else you need to know

UnitedHealth Group has “reoriented” Optum Health, the conglomerate’s health care delivery subsidiary in response to a “slightly disappointing” performance in 2025, according to Krista Nelson, who was appointed CEO of Optum Health in November. During an earnings call last week, Dr. Patrick Conway, who oversees all Optum subsidiaries, said Optum Health’s affiliated network has been narrowed by nearly 20% in the past year and will continue to be reshaped to ensure it aligns with Optum’s strategy for higher quality and greater affordability. He said Optum Health is “focusing on markets where we have strong presence and the complementary wraparound services to succeed in our integrated value-based care approach.” Dr. Conway also said Optum Health’s risk membership has been streamlined by approximately 15%. (Optum Health provides care for Medicare Advantage enrollees through its contracts with insurers.)

Nelson said during the earnings call that Optum Health’s fourth-quarter results reflected one-time items and restructuring steps, and that “medical remained elevated but consistent with our expectations.” UHG reported a loss of $278 million from Optum Health’s operations, compared with a profit of $7.8 billion in 2024. The company attributed the decline to “continued reimbursement pressure due to Medicare funding reductions and elevated medical cost trends.”

UHG executives said they expect UnitedHealthcare’s membership to decrease by 2.3 million to 2.8 million in 2026 across the company’s Medicare Advantage, Medicaid, and commercial business. The decline in Medicare Advantage membership is anticipated to account for much of the decrease, at an estimated 1.3 million to 1.4 million, due largely to competition from other plans during the recent open enrollment period.

CVS Health made efforts to keep independent pharmacies from collaborating with its digital competitors, a report by the House Judiciary Committee alleges. “After surveilling rival hubs and investigating independent pharmacies that work with those hubs, instead of vigorously competing, CVS Health took action to foreclose competitor access to independent pharmacies,” the committee stated in a press release.

Pharmacy hubs — third-party companies that act as liaisons between drug manufacturers, health care providers, and consumers — offer a range of services with the goal of increasing price transparency and patient access to prescription drugs. Blink Health, Carepoint, Nimble, Phil, and Good Rx’s VitaCare are examples of leading digital hub pharmacies.

The interim staff report indicates that CVS Health “acted to stifle innovation and reduce competition from hub pharmacies,” and in doing so may have violated antitrust laws. Specifically, the report states, CVS Health modified its provider manual “to create uncertainty for independent pharmacies working with hubs,” using the modified manual as a pretext to audit independent pharmacies and then sending cease-and-desist letters to pharmacies that worked with hubs. These were “attempts to eliminate competition from an innovative business model meant to disrupt [pharmacy benefit manager]-owned retail pharmacy networks,” the report states, adding, “[t]he disruption of hub pharmacy technology not only helped CVS Health but also harmed consumers.”

CVS Health said in a statement sent to news outlets that the report “is misguided, misleading, and inaccurate. CVS Caremark works to make prescription drugs more affordable in the United States, while ridding the pharmaceutical supply chain of potential fraud, waste, and abuse.”

Community Health Systems continues to divest hospitals, with current deals in the works valued at more than $1 billion. CHS began its hospital portfolio restructuring initiative a decade ago to reduce its debt load. In mid-2015, CHS operated 196 hospitals before spinning off 38 hospitals into Quorum Health Corp. Today, according to CHS’ website, the Franklin, Tenn.-based health system operates 69 affiliated hospitals and approximately 1,000 other sites of care. Earlier this month, CHS signed a definitive agreement to sell Crestwood Medical Center to Huntsville (Ala.) Hospital Health System for $450 million. That transaction is expected to close in the second quarter.

In October, CHS announced two deals. The first was a definitive agreement to sell three Scranton, Pa.-based hospitals, collectively known as Commonwealth Health, to Tenor Health Foundation, a newly established nonprofit organization, for an undisclosed amount. The Pennsylvania Department of Health approved that transaction last week. With that sale, CHS will exit Pennsylvania. Later in October, CHS announced a definitive agreement to sell its 80% ownership interest in two joint ventures that operate Tennova Healthcare-Clarksville to Nashville, Tenn.-based Vanderbilt University Medical Center, the minority stakeholder in the JVs, for $600 million. That transaction is expected to close early this year.

Fairview Health Services, the University of Minnesota, and M Physicians — the group representing medical school faculty and affiliated physicians at the university — reached a 10-year mediation agreement, Minnesota’s attorney general’s office announced last week. Under the agreement, Fairview will invest $1 billion in its medical facilities on the university’s campus and provide $50 million annually to support the university’s medical school. Fairview will also assume operations for the M Health Fairview Clinics and Surgery Center (CSC) on campus; negotiate a new lease with the university; forgive operating debt the CSC owes Fairview; and assume all annual operating losses. M Physicians will remain the sole faculty practice group. While some features of the mediation agreement will be implemented this year, the agreement itself will take effect Jan. 1, 2027, after a 30-year agreement between Fairview Health and the university expires at the end of this year. In conjunction with the new agreement, the M Health Fairview brand will be phased out next year, with Fairview-operated community hospitals and clinics in locations other than on the university campus taking on the Fairview brand.

Premise Health and Crossover Health have agreed to merge. Headquartered in Brentwood, Tenn., Premise Health specializes in employer-based health clinics, offering pharmacy services in addition to primary care and occupational health services. Crossover Health, based in San Clemente, Calif., delivers advanced primary health, including virtual care, with a focus on well-being and prevention. Both companies offer a primary care-centered health plan. The resulting primary care company will serve more than 400 organizations and operate nearly 900 centers throughout the U.S., according to the announcement. Stu Clark, Premise Health’s CEO, will lead the combined organization. The merger is subject to regulatory approval and other customary closing conditions. Financial terms were not disclosed.

What we’re reading

The strategies hospitals are using to prevent readmissions. Modern Healthcare, 1.29.26 (subscription required)

The Hypertension Control Paradox — Why Is America Stuck? NEJM, 1.24.26 (registration or subscription required)

Do GLP-1s Have Deleterious Effects on Muscle? Medscape, 1.27.26