Full Breakdown
Medicare Drug Price Negotiations Yield Significant Savings
11/26/2025, 8:07:59 PM
Overview of the Negotiations
On November 25, 2025, the Centers for Medicare & Medicaid Services (CMS) announced that Medicare will save approximately $12 billion, or 44%, on 15 high-cost medications due to the second round of drug price negotiations mandated by the Inflation Reduction Act (IRA) of 2022. These price reductions are expected to take effect in 2027 and will also save Medicare enrollees about $685 million in out-of-pocket costs. The negotiated prices for key medications, including Ozempic and Wegovy, range from $274 to $386, significantly lower than their list prices.
Key Medications and Savings
The 15 drugs involved in this negotiation accounted for $42.5 billion in prescription costs in 2024, impacting approximately 5.3 million Medicare enrollees. Notable medications include:
- Ozempic: Negotiated price of $274, down from $959.
- Wegovy: Negotiated price of $386 for higher doses, down from $959.
- Xtandi: Negotiated price of $7,004, down from $13,480.
- Calquence: Negotiated price of $8,600, down from $14,228.
These reductions reflect a range of 38% to 85% off the drugs' list prices, although the actual savings may vary due to existing rebates and discounts that Medicare receives.
Official Statements & Responses
Health and Human Services Secretary Robert F. Kennedy Jr. emphasized the administration's commitment to lowering healthcare costs, stating, “President Trump directed us to stop at nothing to lower health care costs for the American people.” CMS Administrator Mehmet Oz noted that the new negotiations achieved “substantially better outcomes for taxpayers and seniors” compared to previous efforts.
Conversely, critics from the pharmaceutical industry argue that government price setting does not lead to lower out-of-pocket costs for patients and may result in reduced coverage for medications. A spokesperson for Novo Nordisk stated, “We have seen that government price setting has not translated to lower out-of-pocket costs for patients.”
Criticism & Opposition
The negotiations have faced opposition from the pharmaceutical industry and some Republican lawmakers, who have labeled the IRA as "disastrous." Critics argue that the program could harm patients by limiting access to medications and increasing insurance premiums. Alex Schriver, a spokesperson for PhRMA, stated, “Whether it is the IRA or MFN, government price setting for medicines is the wrong policy for America.”
Conflicting Reports & Gaps
While the Biden administration claims the negotiations are yielding significant savings, some experts express skepticism about the effectiveness of these price reductions. Stacie Dusetzina, a health policy professor, noted that the negotiated prices for Ozempic and Wegovy are higher than a previous deal negotiated by the Trump administration, suggesting that further improvements could have been made.
What's Next
The next round of Medicare drug price negotiations is set to begin in February 2026, targeting an additional 15 prescription and hospital-administered medications. The ongoing discussions and outcomes of these negotiations will be closely monitored as stakeholders assess their impact on drug pricing and access for Medicare beneficiaries.
