Maryland Board Votes to Cap Government Spending on Ozempic, Projecting $5.8 Million in Annual Savings
Why It Matters
Maryland’s Prescription Drug Affordability Board has voted to place an upper payment limit on Ozempic, a widely used diabetes and weight-loss drug, potentially saving state and local governments an estimated $5.8 million per year on public health plans. The decision marks a significant step in Maryland’s effort to rein in prescription drug costs for government-funded coverage — and could eventually extend to all residents covered by private insurance.
What Happened
The board voted Monday to cap what state and local governments can pay for Ozempic — the brand name for semaglutide — after formally determining the drug is unaffordable for Marylanders. The action follows a similar vote last month placing an upper payment limit on Jardiance, a separate Type 2 diabetes medication, projected to save the state roughly $320,000 annually.
The board also voted to explore alternative payment structures for GLP-1 medications like Ozempic, including a subscription-style model in which the state would pay a fixed annual fee to a manufacturer in exchange for an expanded or unlimited supply of semaglutide.
Neither limit is final. Both the Ozempic and Jardiance proposals must be published in the Maryland Register for a 30-day public comment period before the board can take a conclusive vote. If approved, the payment caps would take effect on January 1, 2027.
By the Numbers
- $5.8 million — projected annual savings for state and local governments from the Ozempic spending cap
- $320,000 — projected annual savings from the previously approved Jardiance cap
- $113 million to $165 million — estimated annual savings if the board’s authority expands to cover all Maryland health plans, not just state government plans
- $9 million to $16 million — potential expanded savings on Jardiance under the same broader authority
- January 1, 2027 — earliest date the spending caps would take effect
Opposition Voices Concerns Over Patient Access
Not everyone supports the board’s approach. Lobbyists for the pharmaceutical industry and some patient advocacy groups warn that spending caps could result in new barriers rather than meaningful relief. Tiffany Westrich-Robertson, representing patient advocacy organizations Ensuring Access through Collaborative Health and Patient Inclusion Council, said in a written statement that patients “could face the consequences through new insurance barriers such as formulary changes, adverse tiering, and expanded utilization management.”
Critics argue the policy may not guarantee lower out-of-pocket costs for individuals and could instead make it harder for some patients to access the medications prescribed to them.
Zoom Out
Maryland’s board is among a growing number of state-level drug affordability bodies attempting to directly cap what public programs pay for high-cost prescription drugs. If the two upper payment limits survive the comment period and take effect for at least a year, a 2025 state law would authorize the board to extend its authority to private insurance plans — a move that could dramatically expand the program’s fiscal reach. Maryland’s budget pressures, reflected in challenges ranging from workforce reductions at state institutions to infrastructure costs, have increased scrutiny on discretionary government spending across sectors.
The board’s slow progress — driven in part by a 2020 gubernatorial veto and years of rulemaking — mirrors the experience of similar bodies in other states that have struggled to translate legislative mandates into operational results quickly.
What’s Next
Both proposals will undergo the mandatory 30-day public comment window before any final vote. If approved, the payment limits take effect at the start of 2027, beginning the one-year clock that would allow the board to seek expanded authority over private insurance plans.
Adding to the transition, Board Chair Van T. Mitchell — who has led the panel since 2020 — announced he intends to step down, though he indicated he may remain until legislative leaders identify a successor. “It is almost six years,” Mitchell said Monday. His replacement will be a joint selection by the Senate President and House Speaker.
Vincent DeMarco, president of Maryland Health Care for All, called the vote long overdue and said the projected savings reflect broader dysfunction in drug pricing. “State and local governments will be saving millions of dollars because they are being gouged by the drug corporations,” DeMarco said.