Why It Matters
Maryland state officials have determined that Ozempic, a widely used diabetes medication, costs too much for taxpayers and approved limits on what state and local governments will pay for the drug. The decision affects government health plans and could set the stage for broader prescription drug cost controls across the state’s insurance market.
The Maryland Prescription Drug Affordability Board’s action is projected to save state and local governments approximately $5.8 million annually on state health plans. If expanded to all Maryland health plans in the future, savings could reach between $113 million and $165 million per year, according to an independent analysis.
What Happened
Board members voted Monday to establish an upper payment limit on Ozempic, the brand name for semaglutide, used to treat Type 2 diabetes and sometimes prescribed for weight loss. The measure restricts how much state and local government health plans can spend on the drug.
The approval follows a similar action last month when the board placed spending limits on Jardiance, another Type 2 diabetes medication, expected to save the state around $320,000 annually.
Both proposals must go through a 30-day public comment period before a final vote. If approved, the spending limits would take effect January 1, 2027.
By the Numbers
State health plan savings from Ozempic limits are projected at $5.8 million per year. Jardiance limits are expected to save $320,000 annually on state plans. If expanded to all Maryland health plans, Jardiance savings could grow to between $9 million and $16 million yearly. Ozempic savings across all plans could reach $113 million to $165 million per year. The board’s implementation timeline means savings will not begin until 2027 at the earliest.
The Pushback
Patient advocacy organizations and pharmaceutical industry representatives raised concerns about the board’s approach. Representatives from advocacy groups Ensuring Access through Collaborative Health and Patient Inclusion Council warned that patients could face new insurance barriers including formulary changes and expanded utilization management requirements.
Critics questioned whether the limits would translate to lower out-of-pocket costs for consumers or simply create additional obstacles to medication access.
Zoom Out
The Maryland board has faced years of delays in implementing its authority to control prescription drug costs. Former Governor Larry Hogan vetoed the board’s funding in 2020 during pandemic-related economic uncertainty, delaying its formation. Current Governor Wes Moore allocated operational funding in 2023, allowing the board to begin its work.
Under legislation passed in 2025, the board cannot expand its authority beyond state health plans until upper payment limits have been in place for at least two prescription drugs for one year. Once that threshold is met, the board could extend cost controls to private insurance plans throughout Maryland.
What’s Next
The board also voted Monday to explore alternative cost-reduction strategies for Ozempic, including a subscription model where the state would pay an annual fee to one manufacturer in exchange for expanded or unlimited supply of semaglutide.
Board Chair Van Mitchell announced his intention to step down after nearly six years leading the panel. He indicated he may remain until legislative leaders select a replacement. The board must publish both the Ozempic and Jardiance proposals in the Maryland Register before taking final votes following the public comment period.