A federal announcement says Medicare has negotiated lower prices for 15 widely used drugs, with the reduced rates taking effect in 2027. The program, which covers more than 50 million people, will see steep cuts for treatments for obesity and Type 2 diabetes: Ozempic, Wegovy and Rybelsus are slated for a roughly 71% discount from current list prices of about $1,000 a month.
The negotiated reductions also cover drugs used to treat asthma, breast cancer, leukemia and other conditions. CMS reported discounts across the list ranging from about 38% for Austedo (used in Huntington’s disease) to about 85% for Janumet (Type 2 diabetes). Officials estimated that if the new prices had been in place in 2024, Medicare would have saved roughly $12 billion.
Dr. Benjamin Rome, a health policy researcher at Brigham and Women’s Hospital, said, “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.” The drugs selected for negotiation met statutory criteria including the absence of generic or biosimilar competition, high Medicare spending, and sufficient time on the market.
These negotiations are the second cohort under the Inflation Reduction Act of 2022, which ended a 20-year ban on Medicare price negotiations. CMS said negotiations for the 15 drugs concluded at the end of October.
The lower prices for Ozempic and Wegovy come after a separate Nov. 6 agreement between the administration and manufacturer Novo Nordisk that set a $245-a-month price for Ozempic and Wegovy. The Medicare-negotiated price announced this week is $274 a month for Ozempic, Wegovy and Rybelsus. Dr. Rome noted it is unclear why Novo Nordisk would offer different prices in separate venues. Novo Nordisk said it looks forward to “additional clarity from CMS on how pricing and coverage will work,” reiterated concerns about government price setting, and expressed commitment to affordable access.
Health and Human Services Secretary Robert F. Kennedy, Jr. released a statement saying, “President Trump directed us to stop at nothing to lower health care costs for the American people. As we work to Make America Healthy Again, we will use every tool at our disposal to deliver affordable health care to seniors.” AARP welcomed the announcement; CEO Dr. Myechia Minter-Jordan called the negotiated prices “another significant next step” in efforts to lower prescription drug costs and said the changes will provide meaningful relief to millions of Medicare beneficiaries.