The federal government has announced the results of the latest round of Medicare drug price negotiations: 15 lower drug prices for Medicare to go into effect in 2027.
Medicare will get a 71% discount on Ozempic, Wegovy and Rybelsus, blockbuster drugs for obesity and Type 2 diabetes that have current list prices of around a thousand dollars a month.
The negotiations also included drugs for asthma, breast cancer and leukemia. The discounts ranged from 38% for Austedo, which treats Huntington’s disease, to 85% for Janumet for Type 2 diabetes.
“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., in a press release. “As we work to Make America Healthy Again, we will use every tool at our disposal to deliver affordable health care to seniors.”
The program that covers drugs for more than 50 million seniors negotiated its first batch of drug prices last year, after the passage of the Biden-era Inflation Reduction Act in 2022.
A provision of that law, passed without Republican support, ended Medicare’s 20-year ban on negotiating drug prices.
Negotiations for this second batch of 15 drugs wrapped up at the end of October.
The Centers for Medicare and Medicaid Services (CMS) say the new, lower Medicare prices would have saved the program $12 billion dollars if the lower negotiated prices had been in effect in 2024.
The latest negotiated prices are great news for taxpayers and patients, says Dr. Benjamin Rome, health policy researcher at Brigham and Women’s Hospital in Boston. Federal taxpayers fund much of Medicare, but beneficiaries also must pay copays and coinsurance.
“This is more savings than the first round, but a lot of that has to do with the nature of the drugs being negotiated this year and probably some learning from experience,” he says.
Drugs were selected earlier this year based on criteria written into the law. They had to have no generic or biosimilar competition, account for a high amount of Medicare spending and be on the market for a number of years.
The lower Ozempic and Wegovy prices follow a separate deal the Trump administration announced on Nov. 6 with Novo Nordisk, which makes both drugs.
That deal was part of the president’s push to get drug companies to voluntarily lower their U.S. prices to match those in other developed countries.
But, confusingly, the discounts from the Medicare negotiations were less significant than what Novo Nordisk agreed to give Medicare as part of the Nov. 6 deal.
That previous deal set a price of $245 dollars a month for Ozempic and Wegovy. But according to the negotiated prices announced this week, the prices of Ozempic, Wegovy and Rybelsus — the company’s Type 2 diabetes pill — will be $274 a month.
“It’s not clear why Novo [Nordisk] would promise a different price in two different venues,” Rome says.
In a company statement, Novo Nordisk explained that it “look[s] forward to additional clarity from CMS on how pricing and coverage will work.”
The separate Trump Administration deal “reflects a broader effort to expand access to obesity care across Medicare and Medicaid,” the statement said.
(The deal expanded access in those two programs to the drugs to people with a body mass index of over 35 and people with BMIs above 27 who have additional health conditions. But the details of exactly how this will work remain unclear.)
The Novo Nordisk statement affirmed that the company is committed to advocating for affordable access to its medications, but “we continue to have serious concerns about the Inflation Reduction Act’s impact on patients and remain opposed to government price setting.”
AARP, an advocacy group for the 125 million Americans who are 50 and older, was pleased with the results of the negotiations.
“Today’s announcement marks yet another significant next step forward in our long-standing efforts to lower prescription drug prices,” AARP’s CEO Dr. Myechia Minter-Jordan said in a statement.
“Older Americans across the political spectrum consistently say lower drug prices are a top priority, and these negotiated prices will bring meaningful relief to millions of people on Medicare.”