The Centers for Medicare and Medicaid Services (CMS) has announced sweeping price reductions for 15 widely used and high-cost prescription medications, marking the latest phase of the federal government’s drug-price negotiation initiative. The cuts include significant discounts for blockbuster diabetes and weight-loss medications such as Ozempic, Rybelsus, and Wegovy.
The new pricing stems from the Medicare Drug Price Negotiation Program, established under the Inflation Reduction Act of 2022. This marks the second round of negotiated reductions, following the first set of agreements finalized last year. While the earlier cuts are scheduled to take effect in 2026, the newly announced pricing changes will roll out in 2027.
Political and Policy Backdrop
The negotiation program, created under the Biden administration, differs sharply from former President Donald Trump’s “most favored nation” pricing strategy, which relied on voluntary agreements instead of legislative authority. Trump recently announced a separate deal with Novo Nordisk—maker of Ozempic and Wegovy—that aims to reduce prices in exchange for tariff relief.
Despite expressing limited public commentary on the negotiation program itself, the current administration has emphasized its commitment to lowering health care costs. Health and Human Services Secretary Robert F. Kennedy Jr. said the government intends to use “every tool available” to advance affordability for seniors.
Billions in Savings for Medicare and Consumers
CMS estimates the new negotiated prices will deliver $12 billion in taxpayer savings and reduce out-of-pocket costs for Medicare enrollees by roughly $685 million in 2027. The lower prices reflect what Medicare will pay drug manufacturers—not necessarily final patient copays—but advocates expect consumers to see meaningful downstream savings.
Drugmakers can opt out of negotiations, but doing so would require them to remove their products from Medicare coverage, a move considered unlikely given the size of the program. Several manufacturers have challenged the negotiation process in court, though none have been successful to date.
Notable Price Reductions
The 15 drugs targeted in this round accounted for $42.5 billion, or 15% of all Medicare Part D spending in 2024. The new negotiated monthly prices, compared with 2024 list prices, include:
- Ozempic, Rybelsus, Wegovy (diabetes/weight loss): $274 (previously $959); higher Wegovy doses: $385
- Trelegy Ellipta (asthma): $175 (down from $654)
- Xtandi (prostate cancer): $7,004 (down from $13,480)
- Pomalyst (chemotherapy): $8,650 (down from $21,744)
- Ofev (pulmonary fibrosis): $6,350 (down from $12,622)
- Ibrance (breast cancer): $7,871 (down from $15,741)
- Linzess (chronic constipation): $136 (down from $539)
- Calquence (cancer): $8,600 (down from $14,228)
- Austedo/Austedo XR (Huntington’s disease): $4,093 (down from $6,623)
- Breo Ellipta (COPD): $67 (down from $397)
- Xifaxan (IBS/diarrhea): $1,000 (down from $2,696)
- Vraylar (antipsychotic): $770 (down from $1,376)
- Tradjenta (diabetes): $78 (down from $488)
- Janumet / Janumet XR (diabetes): $80 (down from $526)
- Otezla (psoriatic arthritis): $1,650 (down from $4,722)**
Health policy experts widely view the negotiated prices as reasonable and potentially transformative. Stacie Dusetzina, a professor of health policy at Vanderbilt University, noted that the reductions should lead to meaningful long-term financial relief for Medicare beneficiaries and taxpayers.
Americans Struggle With Rising Drug Costs
The announcement comes amid persistent public concern over the affordability of prescription medications. A recent survey from the health policy organization KFF found that 1 in 5 U.S. adults reported skipping a prescription due to cost, while 1 in 7 said they have rationed medication by cutting pills or skipping doses.
As drug prices continue to rise nationwide, CMS officials say these negotiations are a key step toward ensuring older Americans can access crucial treatments without sacrificing financial stability.
