The Trump administration announced that it has reached agreements with major pharmaceutical manufacturers to reduce Medicare prices for 15 widely used prescription drugs, a move federal officials say will cut government spending by an estimated $8.5 billion annually beginning in 2027.
Health and Human Services Secretary Robert F. Kennedy Jr. released the negotiated prices after months of discussions with drugmakers, describing the cuts as part of the administration’s broader push to bring down health care costs.
“President Trump directed us to stop at nothing to lower health care costs for the American people,” Kennedy said. “As we work to Make America Healthy Again, we will use every tool at our disposal to deliver affordable health care to seniors.”
Second Year of Negotiations Expands Medicare’s Authority
The newly released prices represent the second set of drug negotiations carried out under a 2022 federal law that permits Medicare to negotiate directly with manufacturers. With this latest batch, Medicare now has negotiated prices for 25 of its costliest drugs. A separate group of 10 drugs negotiated last year under the Biden administration will see their price cuts take effect in January.
GLP-1 Drugs and Other High-Cost Medications Included
Among the new drugs on the negotiated list are the popular GLP-1 diabetes and weight-related medications Ozempic, Rybelsus, and Wegovy. The list also includes Trelegy Ellipta for asthma, Otezla for psoriatic arthritis, and several medications for diabetes, irritable bowel syndrome, and various forms of cancer.
Medicare Administrator Dr. Mehmet Oz said the administration’s proposals produced “substantially better outcomes for taxpayers and seniors in the Medicare Part D program” compared to the previous year’s negotiations.
Federal officials said the Trump administration’s agreements would have reduced Medicare’s net spending on the 15 drugs by roughly 36% had the prices been in effect last year — a larger projected decrease than the 22% savings estimate from the first round of negotiations.
How Much Patients Will Save Remains Unclear
Although federal officials released the negotiated prices for a 30-day supply, individual out-of-pocket costs will still vary for Medicare beneficiaries depending on their plan coverage and annual spending.
A Medicare rule that took effect this year caps patient drug costs at $2,000 annually. Officials estimate older Americans enrolled in drug plans will save a combined $685 million across the 15 medications once the negotiated prices go live.
Spencer Perlman, director of health care research at Veda Partners, said the higher projected savings may reflect a different mix of drugs and lessons learned from the program’s first year. “If we take the administration at their word, I think it demonstrates that they have secured meaningful price concessions for seniors,” Perlman said.
Weight-Loss Drugs Still Face Coverage Restrictions
Medicare is still blocked by law from covering medications prescribed strictly for weight loss, including GLP-1 drugs. However, the Trump administration recently reached a separate agreement with two pharmaceutical companies to create a pilot program expanding access for certain high-risk obese or overweight patients.
The administration has also negotiated other drug pricing agreements this year targeted at reducing costs for the broader U.S. market outside Medicare.
Drugmakers Continue Legal Fight
Pharmaceutical companies remain opposed to the negotiation framework set out in the 2022 Inflation Reduction Act and have filed lawsuits challenging its structure.
“Whether it is the IRA or MFN, government price setting for medicines is the wrong policy for America,” said Alex Schriver, senior vice president of public affairs at the Pharmaceutical Research and Manufacturers of America. “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.”
Medicare is expected to begin negotiations on another 15 medications next year — a round that, for the first time, will include certain physician-administered treatments.