Trump administration says 15 Medicare drugs will cost less starting in 2027
The Trump administration said on Tuesday that pharmaceutical companies agreed to lower Medicare prices for 15 prescription drugs after months of negotiations, setting up what the administration said would produce billions of dollars in savings for taxpayers and older adults. The administration released negotiated “net prices” for a 30-day supply of each drug, but it cautioned that Medicare recipients’ pharmacy counter costs would vary depending on their specific plan and how much they spend on prescriptions during the year.
Health Secretary Robert F. Kennedy Jr. said the deals reflect the administration’s efforts to address affordability concerns for Americans. In a statement, Kennedy said, “President Trump directed us to stop at nothing to lower health care costs for the American people,” adding that, “As we work to Make America Healthy Again, we will use every tool at our disposal to deliver affordable health care to seniors.”
The announcement marks what the administration described as the completion of a second round of negotiations under a 2022 law that requires Medicare to negotiate prices for selected prescription drugs. The administration said the second round brings the total number of negotiated drug prices to 25, and that the new negotiated prices will go into effect in 2027. It said the first round of negotiated prices—covering 10 drugs negotiated under President Joe Biden’s administration—will take effect in January.
The latest negotiated prices apply to a range of drugs, including widely used medications such as Ozempic, Rybelsus and Wegovy, which treat diabetes and obesity-related conditions. The administration also said the negotiated list includes Trelegy Ellipta for asthma, Otezla for psoriatic arthritis, and other drugs used for diabetes, irritable bowel syndrome and certain cancers.
CMS administrator Mehmet Oz said the administration delivered “substantially better outcomes for taxpayers and seniors in the Medicare Part D program” than the previous year’s deals, according to the report. The article said that under the first round of Medicare price negotiations, the Biden administration estimated savings of about $6 billion on net covered prescription drug costs—or about 22%—if the program had been in effect the previous year. The Trump administration estimated its latest round would have saved the government about $8.5 billion in net spending—or 36%—if it had been in effect last year.
The administration also pointed to factors that could shape beneficiary costs beyond the negotiated pricing. It said a new rule that took effect this year caps out-of-pocket drug costs for Medicare beneficiaries at $2,000, and it estimated out-of-pocket savings for Medicare beneficiaries with drug plans of about $685 million. Still, the report said it remains unclear how much the newly announced deals could save beneficiaries at the pharmacy because final costs depend on individual circumstances and plan structures.
The negotiated drug list includes GLP-1 therapies that have drawn particular scrutiny for their high out-of-pocket costs, according to the report. Medicare has long been prohibited from paying for weight-loss treatments, the article said, but it added that a separate deal announced recently between the Trump administration and two pharmaceutical companies includes a pilot program intended to expand coverage for the drugs to additional high-risk obese and overweight people.
The report also said the administration has negotiated other deals with drug companies to lower prices more broadly, while pharmaceutical companies have sued over the Medicare negotiations enabled by the 2022 Inflation Reduction Act. In a statement, Alex Schriver, senior vice president of public affairs at PhRMA, said, “Whether it is the IRA or MFN, government price setting for medicines is the wrong policy for America,” and added that, “These flawed policies also threaten future medical innovation by siphoning $300 billion from biopharmaceutical research, undermining the American economy and our ability to compete globally.”
Looking ahead, the report said that next year, Medicare will negotiate prices for another round of 15 drugs, including physician-administered drugs for the first time.