The Trump administration made headlines on Tuesday evening by unveiling the negotiated prices for 15 drugs that were the subject of Medicare negotiations for the second year. The administration claimed to have saved $8.5 billion, or 36%, compared to what would have been paid last year if the negotiated prices had been in effect. This achievement was touted as a significant win for taxpayers and seniors in the Medicare Part D program.
CMS Administrator Mehmet Oz emphasized the administration’s negotiating prowess, contrasting it with the efforts of the Biden administration. The Inflation Reduction Act, which includes the drug negotiation program, has become a signature achievement of the Biden administration.
Among the drugs included in the negotiated prices were Novo Nordisk’s semaglutide, known as Ozempic, Rybelsus, and Wegovy. These GLP-1 drugs accounted for over $14 billion in gross Medicare drug costs, although the true cost is likely lower due to proprietary rebates. Despite the success of the negotiations, some experts expressed disappointment that the negotiated prices were higher than those achieved through voluntary deals with drug manufacturers.
The negotiated prices announced this year will take effect in 2027, while prices negotiated last year will be implemented in January. Estimated out-of-pocket savings for the 55 million Medicare enrollees with drug coverage are projected to be $685 million. The Trump administration’s negotiations were able to achieve greater savings compared to the previous year, potentially due to the selection of drugs for negotiation and the experience gained from previous efforts.
Looking ahead, Medicare will negotiate prices for another 15 drugs next year, including physician-administered drugs for the first time. This ongoing effort to lower drug prices and reduce healthcare costs for seniors remains a priority for the administration.
Overall, the unveiling of the negotiated drug prices marks a significant milestone in the administration’s efforts to address rising healthcare costs and improve access to affordable medications for Medicare beneficiaries.
