Medicare announces reduced prices in 2027 for 15 Part D drugs

The Centers for Medicare & Medicaid Services announced Nov. 25 that Medicaid recipients will pay less for 15 prescription drugs, including popular weight loss medications Ozempic and Wegovy, asthma treatments and chemotherapy drugs.

Changes go into effect in 2027.

In 2024 the negotiated drugs accounted for about $42.5 billion in prescription spending for the about 5.3 million people with Medicare Part D coverage, according to a news release. A fact sheet issued with the announcement says Medicare will save about $12 billion in costs once the new pricing kicks in and that Part D recipients will save about $685 million in out-of-pocket costs.

The reduced prices were negotiated through the Medicare Drug Price Negotiation Program created by the Inflation Reduction Act signed into law under the Biden administration in 2022. The Trump administration has previously announced drug price reductions through executive orders and negotiations with drug makers.

The legislation ordered the health secretary to negotiate reduced prices for 10 drugs to take effect in 2026, 15 drugs to take effect in 2027, another 15 drugs with prices taking effect in 2028. Pricing for 20 more drugs will take effect in 2029, according to congressional analysis. The drugs negotiated to have price reductions in 2027 and 2028 will only apply to drugs under Medicare Part D.

Stacie Dusetzina, a health policy professor at Vanderbilt University, told NBC News that the negotiated prices “look very reasonable” but noted that the $274 price tag for Ozempic and Wegovy is higher than the $250 price the Trump administration negotiated in a deal with maker Novo Nordisk.

“They should’ve gotten that deal for the taxpayers and the Medicare beneficiaries,” Dusetzina said.

Savings outpace 2024 negotiations

The projected 2027 savings of 36% is better than the 22% savings of net spending, according to an estimate from Goldman Sachs, that Medicare achieved with last year’s first round of price negotiations for 10 different drugs.

CMS Administrator Mehmet Oz said in the news release that the new negotiations stood in “stark contrast” to those that took place in 2024. “Using the same process with a bolder direction, we have achieved substantially better outcomes for taxpayers and seniors in the Medicare Part D program,” Oz said.

Medicines negotiated under the Biden administration, such as the Pfizer and Bristol Myers Squibb blood thinner Eliquis and Amgen’s arthritis drug Enbrel, will still on average more than double – and in some cases five times – what drugmakers had agreed to in other high-income countries.

AstraZeneca’s leukemia drug Calquence, Boehringer’s lung treatment Ofev and Pfizer’s breast cancer drug Ibrance took the biggest hits from this round of Medicare negotiations. Each was slashed by over $4,000 from estimated net prices.

“They are getting more efficient with their methodology,” but this latest batch of newer products likely had “more wiggle room” on price, William Padula, professor of pharmaceutical and health economics at the University of Southern California, told Reuters.

Additional drugs up for negotiation this year included GSK’s asthma and COPD inhaler Trelegy Ellipta, which will have a price of $175 and AbbVie’s irritable bowel syndrome medicine Linzess will cost $136.

List of drugs to see reduced prices

Below are the costs of a 30-day supply of the 15 drugs that were included in the negotiations:

Contributing: Reuters

This article originally appeared on USA TODAY: Medicare prices to drop on 15 drugs starting in 2027, agency announces