The Centers for Medicare and Medicaid Services (CMS) announced lowered prices for 15 high-cost prescription drugs covered under Medicare, including Ozempic and Wegovy. The reductions come through the drug price negotiation program established by the Inflation Reduction Act of 2022 and will take effect in 2027.
This program is different from former President Trump’s “most favored nation” approach, which relied on executive actions and voluntary arrangements with manufacturers instead of a statutory negotiation process. Trump recently touted a separate deal with Novo Nordisk, the maker of Ozempic and Wegovy, tied to tariff relief. The Trump administration has otherwise remained mostly silent about the IRA negotiation program.
This is the program’s second round. Last year, the administration reached negotiated prices for 10 drugs used to treat heart disease and diabetes; those cuts will begin in 2026. Drugmakers can refuse to agree to negotiated prices, but opting out would likely require withdrawing the product from Medicare—cutting off an important market. Manufacturers have mounted legal challenges to the program, but so far courts have not stopped it.
CMS said the negotiated amounts are what Medicare will pay manufacturers; they are not the direct out-of-pocket costs patients see at the pharmacy. The agency estimates the discounts will save taxpayers about $12 billion and reduce Medicare enrollees’ out-of-pocket spending by roughly $685 million in 2027.
Negotiated 30-day prices compared with 2024 list prices:
– Ozempic, Rybelsus and Wegovy (type 2 diabetes and weight loss): $274 negotiated, down from $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 (idiopathic 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 and Austedo XR (Huntington’s disease): $4,093, down from $6,623.
– Breo Ellipta (COPD): $67, down from $397.
– Xifaxan (diarrhea and irritable bowel syndrome): $1,000, down from $2,696.
– Vraylar (antipsychotic): $770, down from $1,376.
– Tradjenta (diabetes): $78, down from $488.
– Janumet and Janumet XR (diabetes): $80, down from $526.
– Otezla (psoriatic arthritis): $1,650, down from $4,722.
Those 15 medicines accounted for about $42.5 billion in spending, roughly 15% of total Medicare Part D expenditures in 2024. Part D covers medicines taken at home rather than drugs administered in clinical settings such as intravenous chemotherapy.
Health and Human Services Secretary Robert F. Kennedy Jr. said the administration will “use every tool at our disposal to deliver affordable health care to seniors.” Stacie Dusetzina, a health policy professor at Vanderbilt University, described the negotiated prices as “very reasonable,” noting the new Ozempic and Wegovy price of $274 is slightly above the $250 figure in the separately announced deal with Novo Nordisk; she said the lower price would be preferable for taxpayers and beneficiaries.
The announcement arrives amid widespread concern about drug affordability. A July survey by KFF found about one in five adults skipped filling a prescription because of cost, and about one in seven reported cutting pills or skipping doses in the past year due to expense.