The Centers for Medicare and Medicaid Services (CMS) has finalized Medicare drug price negotiations for 15 high-cost Part D medications, with new prices taking effect January 1, 2027. This change is expected to lower out-of-pocket costs for millions of seniors and reduce taxpayer spending, including popular GLP-1 drugs.
The Inflation Reduction Act of 2022 created the Medicare Drug Price Negotiation Program, allowing the federal government to negotiate directly with manufacturers to lower costs on certain high-priced brand-name drugs. The 15 drugs below were selected for the second round of Medicare Part D negotiations:
- Ozempic/Rybelsus/Wegovy, for treating Type 2 diabetes and cardiovascular disease and promoting weight loss
- Trelegy Ellipta, for treating chronic obstructive pulmonary disease (COPD) and asthma
- Xtandi, for treating prostate cancer
- Pomalyst, for treating multiple myeloma and Kaposi sarcoma
- Ofev, for treating idiopathic pulmonary fibrosis
- Ibrance, for treating breast cancer
- Linzess, for treating irritable bowel syndrome (IBS) with constipation and chronic idiopathic constipation
- Calquence, for treating mantle cell lymphoma and chronic lymphocytic leukemia or small lymphocytic lymphoma
- Austedo/Austedo XR, for treating chorea in Huntington’s disease or tardive dyskinesia
- Breo Ellipta, for treating COPD and asthma
- Xifaxan, for preventing hepatic encephalopathy and treating IBS with diarrhea
- Vraylar, for treating bipolar I disorder, major depressive disorder and schizophrenia
- Tradjenta, for treating Type 2 diabetes
- Janumet/Janumet XR, for Type 2 diabetes
- Otezla, for treating oral ulcers, plaque psoriasis, and psoriatic arthritis
In 2024, over 5.5 million Medicare Part D members used these drugs. If the new negotiated Medicare prices had been in place, Medicare would have saved an estimated $12 billion that year, according to CMS.
Takeaway
The Medicare Drug Price Negotiation Program is designed to reduce out-of-pocket prescription costs for seniors and generate savings for taxpayers. The third negotiation round begins in early 2026, with 15 additional high-cost drugs to be announced by February 1, and new negotiated prices taking effect for Medicare enrollees on January 1, 2027. Employers should continue to closely track health care trends, utilization, and overall costs. Download the bulletin for more details.
