Commercialization

For the last quarter century, one of the world’s most capable drug developers toiled to make a new, non-addictive kind of painkiller. The journey was fittingly excruciating.

Pain, as Vertex Pharmaceuticals found out, is wildly complex. It starts simple enough, with a sliced hand or burned finger or broken bone. But it convolutes fast. Special nerve cells, activated by potentially dozens of chemicals and proteins, sense the pain and launch a signal up the spine like a firework, lighting up a patchwork of brain regions that interprets this message and decides how the body will feel.

Much about how this process unfolds in any given person remains hazy. Scientists suspect genetics, past experiences and the environment each play some role, perhaps explaining why two people who suffer the same injuries can have such dissimilar pain. This intricate web tripped up many large pharmaceutical firms, a key reason why no truly innovative medicines have come forward in more than two decades.

Vertex was one of the few to trudge ahead. Its pain labs in San Diego discovered, fine-tuned and tested promising compound after promising compound. Invariably, though, studies would show them not safe or potent enough to meet Vertex’s exacting standards. Not until about 20 years into its hunt did the company find a molecule worth championing.

In January, the Food and Drug Administration approved that molecule, now called Journavx, as a treatment for the sharp, short-lived “acute” pain usually felt after an accident or a surgery. Expectations around Journavx are high. With the U.S. still mired in an overdose crisis that’s killed hundreds of thousands of people, Vertex is positioning its medicine as a valuable alternative to opioid-based therapies.

Doctors say they’re eager to have another tool at their disposal. Wall Street views Journavx as a billion-dollar product.

Journavx has a real chance to “bend the curve on the opioid epidemic,” said Stuart Arbuckle, who, as Vertex’s chief operating officer, is overseeing the drug’s launch. “This is the first real alternative. The other is to leave these people in pain, and that's not an acceptable choice.”

Yet the true impact of Journavx will hinge on whether Vertex can contend with a healthcare system that favors the cheapest possible option — a system which, at the hands of drugmakers, insurance companies and pharmacy middlemen, was gamed for opioid use. Doctors across the country, from Oregon to West Virginia to Massachusetts, envision the biggest barrier to prescribing Journavx being insurers, as they tend to resist covering new, higher-cost pain drugs. Vertex set the medicine’s price at $31 a day, many times more expensive than generic opioids like hydrocodone.

Pain is unlike any other drug market, presenting both an opportunity and a challenge for Vertex. The least expensive therapies have ruined countless lives, and wreckage from the opioid epidemic has, for some time, prompted a shift to a layered treatment approach that tries to use these powerful drugs only as a last resort. Vertex’s mission is to convince doctors and insurers that Journavx belongs somewhere in the mix.

Arbuckle claims, as industry executives often do, that his team has had fruitful conversations with these stakeholders, that they appreciate Journavx may fill a major gap in pain management. They’ll need to for most patients to have a shot at accessing the drug.

“In some ways, talk is cheap,” Arbuckle said. “It really will depend on what we see from people in terms of action in the days and weeks following approval.”

Debating value

Supporting Vertex’s case are a pair of large clinical trials that assessed Journavx in people who underwent either a “tummy tuck” or a bunion removal, two notoriously painful surgeries. Both experiments showed the drug was significantly better than a placebo at easing pain. It also worked decently fast. Participants reported some relief within a few hours.

Unlike all other approved pain drugs, Vertex’s blocks tube-shaped proteins found almost exclusively in nerve cells located outside the brain and spinal cord. These “NaV1.8” proteins act like cell towers, transmitting pain waves to the central nervous system. In addition to being effective, studies have found Journavx to be remarkably safe. It doesn’t appear to have the addictive qualities of opioids, which bribe the brain’s pleasure centers, and compared to a placebo it actually was associated with lower rates of common ailments like nausea, constipation and headache.

Vertex took these results and asked the FDA for a broad approval in moderate-to-severe acute pain. With that now in hand, Vertex can enter the segment of the pain market where opioids are more readily prescribed. The company has also been sponsoring research to expand into different types of chronic pain.

There, Journavx has delivered mixed results. Vertex lost $15 billion in market value last December when data from a lower back pain trial disappointed investors and, in August, saw its worth tumble further on news that widening Journavx’s approval wouldn’t be as easy as anticipated. A year earlier, however, a study focused on the chronic nerve pain caused by diabetes showed Journavx to be about as effective as the main ingredient in Lyrica. Analysts described that performance as “solid” and “strong.”

Journavx has other limitations. The two acute pain studies explored whether it is superior to a combination of Tylenol and a commonly prescribed opioid. On that measure the drug fell short, a “glaring” outcome for Richard Vaglienti, medical director of the Center for Integrative Pain Management at West Virginia University, which treats roughly 1,600 patients a month.

Vertex rejects that this finding will be a hangup. “Go and ask physicians and patients,” Arbuckle said, “they'll tell you that's not what they're looking for.”

Vertex did just that last year, commissioning a survey of around 550 healthcare providers and 1,000 adults recently treated for acute pain. Their bigger concerns, according to the company, were the addictive potential of opioids and the exigencies of having few non-opioid options.

Taken together, Vertex’s data have left many experts with a positive view of Journavx, yet no firm agreement on precisely which scenarios it is best suited for. Vaglienti thinks it’s “possible” the drug could have a “decent role to play” managing non-severe chronic pain, and might be particularly useful for patients who can’t tolerate more potent drugs.

Kimberly Mauer, vice chair of the pain center at Oregon Health & Science University, sees it as more widely applicable. “This sounds like an exciting option, because it's going to be opioid-like, and maybe not have the side effects or the risk,” she said. “And if it doesn't work as well as opiates, I'm OK with that. Because I can maybe pair it with something else.”

While drug research and opioid mitigation strategies often focus on chronic pain, having a pill like Vertex’s in the acute setting is “extraordinarily important,” said Theodore Price, director of the Center for Advanced Pain Studies at the University of Texas at Dallas. That’s because many people are susceptible to opioid addiction but don’t realize it until they’ve been prescribed the drugs following a trauma or operation.

Tens of millions of surgeries happen annually in the U.S. And while estimates vary depending on the period studied, recent research indicates a large portion of surgery patients are still prescribed an opioid.

“There's nothing you could say that could convince me this doesn't have an impact on what happens to them later on in their life, at least some portion of them,” Price said.

Accidental overdoses involving an opioid remain high. Nearly 82,000 people in the U.S. died that way in 2022. Almost 15,000 of those deaths involved a prescription opioid. Price himself lost one of his best friends to an overdose about 15 years ago, after the friend was first exposed to opioids for pain management.

“It's a tragedy,” he said. “If we could have a drug that would help us to avoid this, it would be an absolutely massive benefit to humankind.”

The price point

Jose Zeballos understands this need well. As an anesthesiologist and leader of the acute postoperative pain management service at Brigham and Women’s Hospital, Zeballos cares for hundreds of patients every year. A few advances in treatment have emerged during his tenure, like new, longer-lasting local anesthetics, but overall “nothing else has come out that really has helped.”

Vertex’s medicine could therefore be an “amazing” addition, he said, as it may offer some relief not only after surgery, but in everyday pain management as well. Journavx might dull persistent back aches or take the edge off a sports injury. And, since opioids can confuse and disorient, it could be an especially valuable alternative for elderly patients.

Despite the many use cases, Zeballos speculates that doctors will reach for Journavx only if it’s “easily accessible,” and that depends on insurance companies stomaching the drug’s price tag. “It probably all comes down to financials more than anything else.”

Arbuckle says price and access are by far the biggest issues brought up when Vertex’s commercial team discusses Journavx. Millions of prescriptions for acute pain are written every year in the U.S., so, from the payer perspective, “if you're seen millions of anything, you're worried about the budget impact.”

Generic opioids like hydrocodone cost less than $2 a day. Advil and Tylenol are cheaper still, making Journavx’s price of $31 a day high enough to draw close examination from insurers.

Arbuckle argues that’s the wrong comparison, since it doesn’t account for the devastation opioids bring to both the healthcare system and society at large. A report from the Congressional Joint Economic Committee tried to calculate this cost and, looking just at 2020, assessed the total at nearly $1.5 trillion, one-third higher than three years prior.

“This is not an academic, side-by-side, two things have equivalent efficacy and one's cheap and the other one isn't [exercise],” Arbuckle said. “Every time a physician and patient chooses [our drug] when they would previously have chosen an opioid, that is one less opportunity that person is exposed to the potential liabilities of opioids, gets opioid use disorder and becomes a horrible statistic.”

Vertex is beholden to investors as well as patients. The price set by the company may have societal value baked in, but it’s also meant to drive revenue. One analyst expects Vertex’s pain portfolio, which includes Journavx and a series of follow-on drugs already in development, could eventually generate north of $10 billion a year.

Analysts at the investment bank Cantor Fitzgerald recently spoke to a senior director of product development at one of the nation’s largest insurers, UnitedHealth Group. The director predicted Journavx will get broad coverage, as payers are under serious pressure to cover non-opioid medications.

He also doesn’t anticipate the drug will be subject to “step therapy,” a controversial insurer practice that requires patients to “fail” on cheaper drugs before trying newer, pricier medicines.

Optum, a pharmacy benefit manager owned by UnitedHealth Group, declined to answer BioPharma Dive questions on its coverage plans for Journavx. Insurers Humana, Cigna and CVS Health did not respond to requests for comment. Vertex has talked to payers as well as parties that “paid billions of dollars for their role in the opioid epidemic,” according to Arbuckle, and the conversations have been “really positive.”

“Virtually everybody we speak to totally gets it,” he said. “Does that mean we're going to have tough negotiations on price? Of course. Do we think we’ll have to negotiate access? Of course. Do we have to go through formulary procedures? Of course. But it's not like we're getting a stiff arm from people.”

If Vertex does get payer buy-in, Journavx could be an exception to a longstanding, unwritten rule in pain management: fresh therapies take a while to reach patients. One of the company’s immediate goals is to cut down this timeline and to make sure, if patients are prescribed Journavx, they can pick it up over the counter at their local pharmacy.

At OHSU’s pain clinic, Mauer said her team rarely uses new medications within months of them coming to market, because insurers haven’t yet decided coverage plans and the out-of-pocket costs are too high for most patients. Nine times out of 10 the wait is “pretty long.”

“The problem with any new drug is the reluctance of insurance companies to pay for it because of the heavy upfront cost,” Vaglienti said. “So even though there are risks with opioids, from the insurance company side, 30 Percocet really only costs a few dollars.”

A turning tide

Journavx, then, may serve as a proving point for Vertex. The Boston-based biotechnology company has grown to an almost $100 billion valuation by selling big-ticket medicines for uncommon diseases with few to no other remedies. Pain has a trove of generic treatments and, just in the acute setting, Vertex approximates 80 million adults in the U.S. are prescribed a medicine each year.

Pricing barriers like the ones facing Journavx can be overcome, though success often takes time. Between 2018 and 2020, a novel class of injectable migraine drugs came onto a market flush with generics. While one is now approaching blockbuster status — $1 billion or more in annual sales — the others remain only modestly successful. A similar dynamic awaits a new schizophrenia treatment from Bristol Myers Squibb, which, while pegged for success, faces numerous, lower-cost competitors.

Journavx’s launch comes at what might be considered an opportune time. The reckoning over opioids still lingers in the public eye. Earlier this year, members of the Sackler family and Purdue Pharma agreed to pay as much as $7.4 billion in a revised legal settlement over the OxyContin maker’s role in the epidemic.

Federal and state lawmakers are also taking action. Two Congressional bills — one enacted in January, the other introduced in the Senate last year — aim to amend Medicare so older Americans can more easily access and afford a list of certain non-opioid pain medications. Journavx is eligible to join this list, though it likely won’t be added until at least 2026.

Policies like these could help “level the playing field” in the pain market, Arbuckle said, and their arrival represents a “turn in the tide.”

The executive is adamant that Vertex can make the most of this momentum. It’s been preparing for January’s approval for “a number of years now,” he said, and has amassed 150 staff to sell Journavx.

Still, there are doubts the launch will go as smoothly as Vertex — or its investors — might hope.

RBC Capital Markets analyst Brian Abrahams is braced for “limited initial adoption” and thinks the $90 million figure that other analysts have forecast for 2025 sales is “optimistic.” Paul Matteis of Stifel shares those reservations. In acute care, he said, "it's almost impossible to find a good drug launch" for anything non-lifesaving, in large part because the field "moves really slow" to adopt new treatments.

Both analysts note that, for Journavx to hit that $90 million mark, hundreds of thousands of patients would need to take the drug. "No one has a clue how to model it," Matteis said.

The medical and research communities may be holding their breath, too. Price, of the University of Texas, fears that if Vertex doesn’t make a strong enough case, it could dampen enthusiasm around Journavx or even broader pain research.

“Any medication that is effective for treating pain of any type, that doesn't have all the negative things associated with opioid therapy, would be extremely valuable,” said Vaglienti. “And I know the company is probably banking on this being one of those medications. That will remain to be seen.”

For the first time in more than two decades, a completely new form of antipsychotic medication is available in the U.S. following an approval last September by the Food and Drug Administration.

While momentous, the approval has also put a renewed spotlight on an enduring defect of the American healthcare system. An effective medicine is coming to market, but patients may have a hard time getting it at first because of insurance barriers. Analysts on Wall Street are optimistic there won't be many such hurdles, but some psychiatry specialists are cautious, citing past experience with new drugs.

The medicine, which will be sold as Cobenfy, was developed by Boston-based biotechnology company Karuna Therapeutics. In three medium- to large-sized clinical trials, Karuna showed that treatment with Cobenfy significantly relieved schizophrenia symptoms in people with the mental disorder.

Not only that, the drug didn’t cause excessive weight gain, restlessness or movement issues — side effects that are common to existing antipsychotics and, historically, have led patients to either switch medications or stop taking them altogether.

The results have been met with excitement, especially since substantial portions of the schizophrenia population don’t respond to or stay on other therapies. Yet doctors, while eager to have another treatment option, say they aren’t sure how much Cobenfy will ultimately benefit patients.

One main concern is to what extent insurance providers will cover such a drug, given the abundance of cheaper alternatives. The FDA has already approved more than a dozen antipsychotics for schizophrenia, and many have inexpensive generic versions that patients may be encouraged to try first. Cobenfy, meanwhile, carries a list price of $22,500 for a year’s supply, before accounting for insurer rebates or discounts.

A Bristol Myers spokesperson said the company priced the drug “in line with the landscape of branded oral antipsychotics.” Most patients, the spokesperson added, won’t pay the list price.

“You really have to be sure it’s better than everything else out there that’s cheaper and more readily available,” Mitzi Gonzales, a neuropsychologist and director of translational research at Cedars-Sinai, said in a 2024 interview.

Carol Lim, a psychiatrist at Massachusetts General Hospital, noted in a 2024 interview how, after approval of the schizophrenia drug Caplyta in 2019, it was hard to get insurance coverage until after other treatments failed.

Cobenfy’s rollout is being handled by Bristol Myers Squibb, which acquired Karuna for $14 billion. Bristol Myers’ Chief Commercial Officer, Adam Lenkowsky, said on an earnings call in July 2024 that payers have given “very positive feedback” to the company and acknowledged Cobenfy “fills a significant unmet need.”

Lenkowsky added that a team at Bristol Myers has, for months, been pitching Cobenfy to state Medicaid directors and Medicare payers. Estimates hold that more than 80% of schizophrenia patients are on those programs, meaning buy-in from them will be “critical,” according to Lenkowsky.

Earnings released by the company showed Cobenfy earned $10 million in sales during its first quarter on the market and $35 million over the next three months. Citing data from Clarivate, Bristol Myers estimates the U.S. schizophrenia population totals around 1.6 million.

Cobenfy’s labeling includes warnings of risks that include urinary retention, increased heart rate and swelling of the face and lips. The FDA advises against using the drug in people with moderate to severe kidney impairment, or with known liver impairment.

On Wall Street, expectations for Cobenfy are high. The investment firm Cantor Fitzgerald envisions annual sales reaching $1 billion starting in 2026. More broadly, analysts have predicted the drug will generate north of $3 billion by 2030, according to Leerink Partners.

“I think you’re going to get a massive bolus of early adopters,” Paul Matteis, an analyst at Stifel who previously covered Karuna, said prior to approval. “And I think Bristol [Myers] just has to not mess it up.”

Sales could rise higher if Cobenfy notches additional approvals, a goal Bristol Myers is already working toward. Bristol Myers plans to push the drug into late-stage testing for both bipolar disorder and the agitation that often accompanies Alzheimer’s disease. And in 2026, the company anticipates results from two trials of some 800 people with psychosis tied to Alzheimer’s.

Cobenfy isn’t like available antipsychotics, all of which work by balancing levels of the chemical messengers dopamine or serotonin. It instead activates “muscarinic receptors,” a type of protein researchers believe harmonizes certain brain circuits that aren’t properly functioning in schizophrenia and some other psychiatric conditions.

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By Lumanity

Breakthrough cancer treatments are advancing faster than the systems built to deliver them. Cell and gene therapies, radiopharmaceuticals, and other advanced modalities can now achieve outcomes once thought impossible. Yet, as the Commercializing Uphill panel at Lumanity’s Cancer Progress 2025 explored, the challenge is no longer proving the science—it is overcoming the commercial, logistical, and economic barriers that prevent these therapies from reaching patients.

The discussion brought together leaders with perspectives spanning laboratory research, manufacturing, commercialization, and patient access. Their consensus was clear: without business models that evolve as quickly as discovery, progress will stall at the point of delivery.

Nearly a decade after the first CAR-T approvals, commercial rollouts remain slow, uneven, and resource-intensive. One biotech CEO described the reality: “These are very complex therapies, and they’re novel from a regulatory perspective. Companies take on enormous risk to develop and get them approved, but the commercial payoff is still not assured.” For smaller companies, the gap between proof-of-concept and large-scale delivery can be existential. Despite strong clinical success rates, fewer than 10 percent of unpartnered Phase 3 assets secure pharma partnerships, a sign that investor caution is replacing early enthusiasm. As one senior industry advisor noted, “The science is going to take care of itself, but the innovation in how we deliver and scale therapies is still stuck in neutral.”

Even after regulatory approval, many patients face long waits or limited access. For one leading cell therapy, demand is high, but delivery is concentrated in about 100 accredited centers nationwide. Long travel distances, complex referral pathways, and contracting processes hinder adoption. The human cost is stark. A cell therapy chief scientific officer described the harsh reality: “It costs about $400,000 just to make one patient product. Some patients have died waiting for treatment because the process takes too long.”

Cell therapies, especially autologous CAR-Ts designed for individual patients, push traditional manufacturing and distribution systems to their limits. Even allogeneic “off-the-shelf” versions introduce new logistical and safety complexities. As one panel moderator observed, “These are marvelous technologies, but it’s hard to break the mold in already busy clinics.” The field has entered a more cautious phase, and personalized medicine’s promise will remain unfulfilled unless commercialization models align with the realities of scale.

There are, however, signs of adaptation. Lessons from the rollout of checkpoint inhibitors show how education, guidelines, and provider training can transform once “unmanageable” therapies into routine practice. Similar steps are emerging for cell therapies, with specialized care teams, standardized protocols, and targeted training helping providers adapt. One cell therapy commercial leader stressed that compelling clinical data alone was not enough: “We had to invest heavily in manufacturing and center support to get there.”

In radiopharmaceuticals, another industry executive pointed to incremental but impactful changes, such as site start-up support and professional society advocacy, that are expanding access despite supply-chain constraints. Commercialization innovation is also taking new forms. Allogeneic and in vivo approaches aim to shorten wait times and simplify logistics. Digital ordering systems are reducing administrative burden, although their proliferation risks overwhelming providers. Some payers are experimenting with reimbursement models that spread costs over time, easing financial strain on both patients and health systems.

The panel’s message was consistent: commercialization planning must begin early. For investors, predicting bottlenecks is as critical as evaluating clinical data. For pharma, the standard is no longer just efficacy; it is proof that manufacturing, access, and economics can scale. The experts outlined four imperatives for progress: bridge science and business so frameworks match the complexity of personalized medicines; anticipate barriers early, including site capacity and reimbursement; apply adoption lessons across modalities; and accelerate uptake through expanded training, payer alignment, and safer next-generation therapies.

Conclusion: Access as the True Benchmark

The verdict from Cancer Progress 2025 was unanimous: the future of cancer treatment will be measured in access, not just approvals. Without business models that evolve as quickly as scientific discovery, patients will remain in limbo, waiting for breakthroughs that exist but cannot be reached. Commercialization innovation now matters as much as scientific innovation. Only when systems are ready to deliver complexity at scale will advanced modalities fulfill their promise.

Read Lumanity’s full whitepaper on Cancer Progress 2025 here.

About Lumanity

Lumanity is a leading global strategic partner for biopharmaceutical companies. We engineer breakthrough value that transforms lives. By combining deep scientific, clinical, medical, regulatory, and commercial expertise with advanced technology and AI-driven tools, we guide complex decision-making. With 1,200 experts across 50+ countries, and offices in North America, the UK, the EU, and Asia, we partner with leading biophama companies worldwide. Our integrated approach drives market success and delivers better patient outcomes.

Learn more about Lumanity’s commercialization capabilities here.

Medicare’s next drug price negotiations will treat Novo Nordisk’s semaglutide as a single product, regardless of whether the metabolic disease medicine is used to treat diabetes or heart risk, and whether it is delivered by shot or pill.

Semaglutide was one of 15 drugs the Centers for Medicare and Medicaid Services selected in January for a second round of price talks set up by the Inflation Reduction Act. Besides semaglutide, which Novo Nordisk sells as Ozempic, Rybelsus and Wegovy, the agency also chose other diabetes drugs, respiratory therapies and several cancer treatments.

CMS’ treatment of semaglutide as one product is because the agency focuses on a drug’s “active moiety,” or the core compound that has a biological effect, rather than treat each use approved by the Food and Drug Administration separately.

“The statute and our guidance [are] very clear that when a drug is selected for negotiation, all dosage forms and strengths with the same active ingredients are included, even if they are sold under different formulations or brand names,” said Erin Richardson, CMS’ former chief of staff, on a call with reporters.

Ozempic was approved in 2017, making semaglutide subject to negotiation for the first time in 2025 under rules laid out in the Inflation Reduction Act. Eli Lilly’s competing products Mounjaro and Zepbound, which contain the active ingredient tirzepatide, gained first approval in 2022, meaning they wouldn’t be subject to price negotiation until 2030.

While semaglutide is widely covered within Medicare for diabetes, the health insurance program is not currently permitted by law to reimburse for treating weight loss, where Novo has since 2021 sold semaglutide as Wegovy.

Wegovy is also approved to lower cardiovascular risk in people with heart disease and who are either overweight or have obesity, however. Medicare determined last March that this use could be covered under Part D plans. And the Biden administration last fall proposed a new rule permitting Medicare to cover obesity treatment more broadly.

The “maximum fair price” the U.S. government negotiates under these talks will be a single cost. Dosage strengths, formulations and packaging prices for Ozempic, Rybelsus and Wegovy would be adjusted to meet that monthly price.

Semaglutide products in Medicare are also already likely to be discounted from their list prices — $998 a month for Ozempic and Rybelsus, $1,349 a month for Wegovy — although CMS officials wouldn’t confirm that Part D insurance plans receive rebates. In 2023, Novo paid 62% of its gross sales back in rebates across its sales. Of roughly $88.3 billion in gross sales, about $32 billion was paid back in rebates to Medicare and U.S. managed care plans.

“We remain committed to working with policymakers to advance solutions to ensure access and affordability for all patients,” a Novo spokesperson said in an emailed statement. “That is why we are deeply concerned about the price-setting process, which could negatively impact patients’ ability to access their medicines and threatens to stifle future scientific development of life-changing medicines for chronic diseases in which there is a real unmet need.”

Negotiations over semaglutide will be Novo’s second time discussing price concessions with CMS. The first round of talks, which yielded prices set to take effect in 2026, included insulin aspart, which Novo sells as several different products.

That selection triggered a lawsuit from Novo, citing CMS inclusion of multiple products by way of selecting one active ingredient.

That suit could provide an opportunity, albeit a long shot, to exempt Wegovy and Rybelsus from this round of price negotiations. CMS in its guidance said it applies price negotiations across products using the same active ingredient or moiety because it reduces the incentive for companies to engage in “product hopping,” or making small changes in drug formulation to extend patent-protected exclusivity.

Novo claimed the guidance went beyond what the IRA allowed because it interpreted the law’s call for price negotiations on “drug products” and “biological products” to mean all those with the same active moiety or ingredient. By grouping together all of Novo’s insulin products, CMS invoked negotiations on more than the 10 products permitted by the IRA in the initial round, Novo argued.

The courts so far have rejected Novo’s lawsuit, ruling in July the company was effectively suing on behalf of other manufacturers when it made that claim, which it doesn’t have standing to do. Novo has appealed.

Whether CMS will be able to carry out its plans — and even whether the program will survive a Trump administration and Republican Congress seeking to undo the work of the Biden administration — is subject to some question. Already, drugmakers are lobbying the Trump administration to change the Inflation Reduction Act.

On the January call with reporters, CMS officials emphasized their selections were guided by the Inflation Reduction act, noting that any other team that followed statute would end up choosing the same slate of 15 medicines.

Semaglutide, the popular drug sold by Novo Nordisk as Ozempic for diabetes and Wegovy for weight loss, was among a group of widely used medicines selected by the U.S. government for the next round of price negotiations under a 2022 law aimed at curtailing pharmaceutical costs within Medicare.

The Biden administration released the list of 15 drugs Jan. 17 in one of its final acts of healthcare policy before President-elect Donald Trump took office on Jan. 20.

Publication of the list kicks off a monthslong process that will feature a series of meetings between drugmakers and the Centers for Medicare and Medicaid Services, which oversees the Medicare insurance program. The negotiations, which drugmakers have opposed vociferously, will yield “maximum fair prices” that take effect in 2027.

Also on the list are Xtandi, Ibrance, Calquence and Pomalyst, blockbuster drugs for cancers of the prostate, breast, blood and bone marrow. Trelegy Ellipta, an inhaler used for asthma and chronic obstructive sleep apnea, is included, as are Otezla, a psoriasis medicine, and Vraylar, an antipsychotic.

Ozempic and Wegovy are particularly significant inclusions. Their use in the U.S. has skyrocketed due to the potency of semaglutide, which is the active ingredient of both, in helping control diabetes and shed weight.

Currently, Medicare is barred from covering drugs solely for weight loss. Wegovy is also approved to lower cardiovascular risk in people with heart disease who are either overweight of who have obesity, however. And last November the Biden administration proposed a rule that would eliminate that restriction and permit Medicare coverage of obesity treatment.

Some 5.25 million people covered by Medicare took one of the 15 selected medicines between November 2023 and October 2024, according to information provided by CMS. Over that period, gross spending by Medicare on those products totaled $41 billion, or about 14% of total prescription drug costs under the program’s “Part D” benefit.

“The U.S. has the most innovative treatments in the world,” said former CMS administrator Chiquita Brooks-LaSure on a January call with reporters. “But that’s only meaningful if people can actually access them.”

Medicare’s power to negotiate drug prices in this fashion is newly granted by the Inflation Reduction Act, which Congress passed two years ago in a significant defeat for the pharma industry.

For the first time, the law allows Medicare to use its scale and market power to extract price concessions from drug companies on certain, select medicines. Only “single-source” branded drugs that lack generic competition and are among the 50 products with the highest spending in Medicare Part D can be picked. Part B drugs, which include medicines administered by physicians, are exempt from the first two cycles of negotiations.

The Inflation Reduction Act also specifies that selected drugs must have been on the market in the U.S. for either seven or 11 years depending on whether they are small molecules or biologics, respectively.

CMS chose 10 drugs for the first round, which concluded last summer with the publication of the discounted prices government negotiators extracted from companies. According to the agency, the new prices were on average 38% to 79% lower than the drugs’ list price, or wholesale acquisition cost.

Assessing savings from those efforts is complicated, however. Health plan sponsors that contract with the government to administer Part D benefits already secure drugmaker rebates that can result in lower net prices. Those net prices are not public, so it’s hard to precisely compare the negotiated prices on the first 10 drugs, which take effect in 2026, to what Medicare paid previously.

For this second round, CMS tweaked the rules guiding negotiations, allowing for more meetings with drugmakers and greater input from patients and physicians.

The pharma industry has lambasted the process as essentially price-setting, rather than a true negotiation, because the Inflation Reduction Act gives CMS the power to levy exceptionally steep fines if drugmakers don’t accept the offered “maximum fair price.”

During the first round of negotiations, CMS said it revised its initial offers upwards over the course of meeting with drugmakers. For five of the 10 drugs, the agency reached an agreement with the respective drugmaker as a result of a negotiation meeting. For the other five, the relevant company accepted CMS’ final written offer, per a fact sheet published in August.

Drugmakers have also argued the Inflation Reduction Act’s different treatment of small molecules and biologics is skewing R&D incentives away from the former type of medicine, which is often made in convenient oral doses.

A handful of pharma companies have sued to block the law on various grounds, including its constitutionality, but have so far been unsuccessful. In mid-January, generic drugmaker Teva Pharmaceutical joined in, filing a suit in U.S. district court that challenges how CMS has interpreted the law.

While Trump may not seek to repeal the Inflation Reduction Act wholesale, it’s uncertain how aggressively his administration will handle the negotiations, which will take place between now and November 2025 for this second round. Pharma companies are unpopular in the U.S., and the law gives Trump an opportunity to take credit for bringing down drug prices.

On the January call with reporters, Brooks-LaSure emphasized how CMS’ actions were taken in accordance with statute. “The law is clear and straightforward in how it specifies the criteria for how the drugs are selected for negotiation,” Brooks-LaSure said. “CMS followed the law’s criteria, and that is how we determined the 15 drugs for selection.”

Novo Nordisk in June terminated a marketing deal for its obesity drug Wegovy with Hims & Hers Health just eight weeks after it began, claiming the telehealth company “has failed to adhere to the law which prohibits mass sales of compounded drugs.”

Hims had marketed compounded Wegovy under laws that permit it to while a drug is in shortage, but the U.S. government said the shortage ended in February. The Danish drugmaker partnered with Hims and other telehealth companies to help its customers transition to branded Wegovy.

Novo said it is taking the action to protect patients from “knock-off drugs made with foreign illicit active pharmaceutical ingredients” that Hims justified under the “false guise of ‘personalization.’” In response, Hims CEO Andrew Dudum said Novo was “misleading the public.”

Novo and rival Eli Lilly struggled to meet demand for their obesity drugs following their respective launches, forcing them to spend hundreds of millions of dollars to expand manufacturing of the complex, injectable peptide drugs. Besides adding factory capacity, Novo’s controlling shareholder purchased the contract manufacturing company Catalent for $16.5 billion and sold three of its factories to Novo Nordisk.

While the drugs were officially in shortage — as declared by the Food and Drug Administration — companies like Hims were permitted under federal law to provide copycat versions of Wegovy and Zepbound manufactured at compounding facilities.

This fueled the growth of Hims and other telehealth companies, which were able to provide them in direct-to-consumer channels as well as better accommodate cash-pay patients who can’t get obesity drug coverage through employers. Some analysts believe cash-pay patients will constitute a much bigger share of the obesity drug market than other types of drugs.

With the end of the shortage, both Novo and Lilly sought to provide similar types of services through pharmacies and other types of consumer-facing companies, which also included cash-pay options and lower prices for people who paid cash. Lilly initially used online pharmacies like Eversana and Truepill, while Novo partnered with the telehealth companies, including LifeMD and Ro in addition to Hims. Lilly later signed deals with Ro, Teladoc and LifeMD.

In a recent presentation at an investor conference, Lilly finance chief Lucas Montacre said some compounders had continued to combine the active ingredients of FDA-approved obesity drugs with other molecules or vitamins and called them personalized treatments.

“We are enforcing in those agreements that, as long as the product is out of the shortage list, those telehealth services are not compounding either [Zepbound] or [Wegovy],” Montacre said of its deals.

Hims said the deal ended because it was defending the “ability of providers and patients to control individual treatment decisions.”

“In recent weeks, Novo Nordisk’s commercial team increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients. We refuse to be strong-armed by any pharmaceutical company’s anticompetitive demands,” Dudum wrote in a post on X.

Pfizer and other large pharmaceutical companies are taking seriously President Donald Trump’s demand that drugmakers make more of their medicines available direct to consumers in the U.S. at lower cost, Pfizer CEO Albert Bourla said.

“We have serious discussions in the industry,” Bourla told investors on a conference call in August. “I’m connected very often individually with all the major companies and they are all ready to roll up their sleeves and execute something like that.”

Pfizer and partner Bristol Myers Squibb recently announced plans to offer their widely-used blood thinner Eliquis at a discounted cash price through an online service. The company previously launched a direct-to-consumer service that allows patients to book telehealth appointments, schedule vaccinations and fill prescriptions for certain medicines, such as those Pfizer sells for migraine and COVID-19.

“We think it is a fantastic way to go ahead, so we will work collaboratively to do it,” Bourla said. 

Obesity drugmakers Eli Lilly and Novo Nordisk have also recently opened up more ways for cash-paying patients to access their weight loss medicines directly. Other companies are signaling interest, too, in exploring ways to sidestep pharmacy benefit managers. These drug-purchasing middlemen extract from drugmakers rebates that insurers say they use to lower overall costs, but not necessarily in ways that are obvious to a prescription-filling patient.

Expanding direct-to-consumer options was one of four demands Trump recently made of the pharmaceutical industry in letters issued to 17 drugmakers, including Pfizer. 

In those letters, the president threatened to use “every tool” the U.S. government has available if the companies don’t take steps to lower the cost of their products to the prices paid in other industrialized countries. Such a “most favored nation” policy could be a major blow to the industry, although analysts are divided on how sweeping its impact would be if limited only to Medicaid, as Trump indicated.

In August, Bourla said he was in “active discussions” at the “highest levels of the U.S. government,” including conversations with Trump, Health and Human Services Secretary Robert F. Kennedy Jr., and Centers for Medicare and Medicaid Services Administrator Mehmet Oz. In addition to leading Pfizer, Bourla is the current board chair of industry lobbying group PhRMA.

“The letter asks a lot from us,” Bourla added. “But we are engaged in productive discussion with them and in general I’m happy with the way that they listen to us.”

Pricing threats aren’t the only challenge drugmakers face in the U.S. The Commerce Department is nearing the end of an investigation into pharmaceutical imports expected to result in sector-specific tariffs. Trump has also said that his administration will initially impose a small levy on pharmaceuticals that could later rise as high as 250% over time.

Such duties would be costly for drugmakers, but analysts believe a phase-in period would allow many companies to adjust their supply chains in such a way that the worst financial hit could be mitigated. Already, most of the largest drugmakers have announced major manufacturing investments in the U.S.

Novo Nordisk is battling back against the threats to its obesity drug business, saying in August that it expects a significant boost from a major insurer deal and wider legal actions against the companies making knockoff versions of Wegovy. 

Competition from Eli Lilly’s rival weight loss drug Zepbound as well as the makers of compounded, “personalized” forms Wegovy have crippled Novo’s market prospects in obesity. The company has lost nearly half of its share value this year, announced a CEO switch and cut its financial forecasts.

But in July, Wegovy became the preferred anti-obesity medication on the national formulary for CVS Health’s pharmacy benefit manager Caremark, giving Novo a leg up on Zepbound in the tens of millions of American patients covered by the company’s plans. That decision has shifted patients to Wegovy “largely in line with what we expected,” said Novo’s U.S. operations head Dave Moore, in August.

Novo also accelerated a push into direct-to-consumer channels for Wegovy, an initiative that’s part of a broader trend among pharmaceutical companies. While direct-to-consumer marketing fueled an increase of total Wegovy cash-pay prescriptions from 4% to 10% in the U.S. since January, growth has been slower than expected, according to Moore. The company “will continue to invest” in the expansion of those channels, he added.

Those efforts, however, will likely necessitate a price cut for Wegovy to make the drug more attractive to those paying cash and “reduce friction” for insured people, CFO Karsten Munk Knudsen said.

Drug compounders, meanwhile, pounced on an earlier supply shortage of Wegovy and Zepbound and have eaten into Novo’s sales in particular. Though the Food and Drug Administration has since declared the shortage over, companies have justified continued marketing of copycat versions by offering “personalization” that adjusts doses or adds vitamins.

Novo executives said they’re pressing the FDA to enforce bans on compounded Wegovy. The company also announced 14 more lawsuits in August seeking to block sales, bringing the total number of court cases it’s started to 132.

Still, a broad change to federal law may be necessary to stop sales, as compounders are currently taking advantage of a legal loophole. “There is nothing categorically that is off the table” in terms of litigation, Moore said.

Eli Lilly responded to a Trump administration plan to lower U.S. drug costs by claiming it will raise prices in European countries to “align” them with the costs paid “across developed countries.”

The effort includes an agreement with the U.K. government to hike the price of the company’s blockbuster diabetes medicine Mounjaro “while maintaining access” for people with the disease, Lilly said.

Lilly didn’t commit to cutting U.S. prices. But it did say that for prices to be reduced in the U.S., the amounts “paid by governments and health systems need to increase in other developed markets like Europe." The company has been working with other, unspecified governments to make other pricing adjustments, too. 

Lilly didn’t specify how it will raise prices in those countries — many of which have nationalized healthcare systems that negotiate drug costs for their entire population — without affecting access. It also didn’t reveal whether the planned hikes would be tied to a drug’s list price or the confidential rebate deals cut between drugmakers and national customers.

The company also pointed out the difficulty of lowering prices in the U.S. because of the healthcare system’s structure.

“The U.S. system is complex and opaque, with multiple cross subsidies, abuse of government programs like 340B, and insurance cost-sharing burdens for patients,” Lilly said.

Through an executive order signed in May, President Donald Trump aims to link the price paid for drugs in the U.S. to the lowest price paid in other high-income countries. This “most favored nation” policy is also meant to spur price negotiations between the federal government and companies, as well as to push drugmakers to establish new ways to distribute medicines to patients at a reduced cost.

Letters the administration sent to executives at 17 drug companies in July redoubled that effort while vaguely warning of consequences for companies that don’t comply.

The “most favored nation” policy has come alongside the threat of tariffs on pharmaceuticals, which has spurred many large drugmakers — Lilly among them — to promise to invest billions of dollars in U.S. drug manufacturing.

Lilly reiterated its objections to pharmaceutical levies, arguing they’d “raise costs, limit patient access, and undermine American leadership, especially for companies already investing heavily in domestic manufacturing.”

“We urge the administration and Congress to prioritize strategic incentives that strengthen U.S. manufacturing and supply‑chain resilience without sacrificing access, affordability, innovation, or American leadership,” Lilly said.