The Trump administration has announced new lower Medicare prices for 15 widely used medications covered by the program. The administration claims the effort will cut federal spending on those drugs by 44%, totaling approximately $12 billion compared to last year’s spending.
The lower prices, achieved through negotiations authorized by the 2022 Inflation Reduction Act (IRA), will take effect in 2027 for medications purchased through Medicare’s Part D prescription plan. Prior to the IRA, Medicare was prohibited from negotiating drug prices. The discounts secured range widely, from 38% to 85% off the drugs’ list prices. The 15 drugs targeted include widely used medications for cancer, diabetes, and asthma, including the GLP-1 drugs Ozempic and Wegovy.
The Centers for Medicare and Medicaid Services (CMS) said the new prices are expected to save the 55 million people enrolled in the Part D pharmaceutical plan a total of about $685 million in out-of-pocket costs when the reductions begin in 2027. About 5.3 million Medicare Part D beneficiaries used these 15 discounted drugs in 2024, which collectively accounted for up to $42.5 billion in prescription drug costs before existing discounts.
On average, this equates to savings of roughly $129 per Medicare enrollee using these specific medications.
“This year’s results stand in stark contrast to last year’s,” said CMS Administrator Mehmet Oz, MD, in a press release. “Using the same process with a bolder direction, we have achieved substantially better outcomes for taxpayers and seniors in the Medicare Part D program — not the modest or even counterproductive ‘deals’ we saw before.”
“President Trump directed us to stop at nothing to lower health care costs for the American people,” said Health and Human Services Secretary Robert F. Kennedy, Jr. “As we work to Make America Healthy Again, we will use every tool at our disposal to deliver affordable health care to seniors.”
Notable price reductions for a 30-day supply include Ozempic and Wegovy priced at $274, down from $959, and the breast cancer drug Ibrance at $7,871, down from $15,741 (a 50% discount).
However, the IRA-negotiated price of $274 for Ozempic and Wegovy is higher than the $245 price set under a separate “most favored nation” agreement previously brokered by President Trump. CMS stated that the earlier deal’s pricing is “expected to supersede” the prices stipulated under the IRA negotiation.
Advocacy groups praised the savings, with Merith Basey, executive director of Patients For Affordable Drugs, calling the negotiation program “the most powerful tool we currently have in place to rein in drug prices.” However, a spokesperson for the Pharmaceutical Research and Manufacturers of America (PhRMA) criticized the IRA, stating its “flawed policies” “threaten future medical innovation by siphoning $300 billion from biopharmaceutical research.”
Others suggested that the savings may not be as high as the administration had hoped.
“The announcement was made by press release during a holiday week which may be a sign these are not as significant as they could have been,” Raymond James analyst Chris Meekins, a health official in the first Trump administration, wrote in an investor note.