The U.S. Department of Health and Human Services announced 15 additional drugs for the Medicare Drug Price Negotiation Program. This is part of a consistent effort to lower prescription drug costs for millions of Americans. Read on to learn how this could impact you.
What is the Medicare Drug Price Negotiation Program?
The Medicare Drug Price Negotiation Program is an initiative under the Inflation Reduction Act of 2022 (IRA) geared towards lowering Medicare prescription drug costs and federal drug spending.
Under the Inflation Reduction Act, the Secretary of Health and Human Services (HHS) can directly negotiate the cost of certain drugs with manufacturers. This process reduces prescription drug costs and provides significant savings for millions of Medicare beneficiaries.
The Drug Price Negotiation Program often prioritizes single-source drugs with no generic or biosimilar competition — or simply put, drugs that are made by a single manufacturer and have no generic or biosimilar alternatives. These prescription drugs are often expensive and patent-protected, making the advocacy for lowering costs even more significant.
During the first round of negotiations in 2024, the Centers for Medicare and Medicaid Services (CMS) negotiated the price of 10 drugs. Starting January 1, 2026, the agreed-upon maximum fair price for these 10 drugs goes into effect and will save beneficiaries an estimated $1.5 billion (aggregated) on out-of-pocket costs.
Which drugs are part of the Medicare drug price negotiation in 2027?
In January 2025, 15 additional drugs that fit the CMS-set criteria were selected to be part of the Drug Price Negotiation Program (2027):
| Drug name | Common used to treat: |
| Ozempic, Rybelsus, Wegovy | Type 2 diabetes; Type 2 diabetes and cardiovascular disease; Obesity/overweight and cardiovascular disease |
| Trelegy Ellipta | Asthma; Chronic obstructive pulmonary disease |
| Xtandi | Prostate cancer |
| Pomalyst | Kaposi sarcoma; Multiple myeloma |
| Ibrance | Breast cancer |
| Ofev | Idiopathic pulmonary fibrosis |
| Linzess | Chronic idiopathic constipation; Irritable bowel syndrome with constipation |
| Calquence | Chronic lymphocytic leukemia/small lymphocytic lymphoma; Mantle cell lymphoma |
| Austedo / Austedo XR | Chorea in Huntington’s disease; Tardive dyskinesia |
| Breo Ellipta | Asthma; Chronic obstructive pulmonary disease |
| Tradjenta | Type 2 diabetes |
| Xifaxan | Hepatic encephalopathy; Irritable bowel syndrome with diarrhea |
| Vraylar | Bipolar I disorder; Major depressive disorder; Schizophrenia |
| Janumet; Janumet XR | Type 2 diabetes |
| Otezla | Oral ulcers in Behçet Disease; Plaque psoriasis; Psoriatic arthritis |
When will I start to save on out-of-pocket costs?
It’s estimated that Medicare Part D beneficiaries will save billions on prescription drug costs thanks to the Drug Price Negotiation Program. However, the savings take time to activate.
The first cycle of negotiations, which took place in 2024, will go into effect on January 1, 2026. After this, beneficiaries should start to see out-of-pocket savings for the first 10 drugs that were previously announced.
Cost savings for prescription drugs in the second negotiation cycle will go into effect on January 1, 2027. That’s when Part D beneficiaries will start getting a significant discount on prescription drug prices for the fifteen drugs listed above.
Though these new prices don’t go into effect for another couple of years, the IRA has mandated a $2,000 out-of-pocket maximum for Medicare Part D. The Office of the Assistant Secretary for Planning and Evaluation (ASPE) projects that around 11 million Part D recipients will hit this out-of-pocket max in 2025, saving around $600 per enrollee and up to $1,100 for enrollees that don’t receive financial assistance for Part D costs.
The end result: Lower prescription drug costs for Medicare beneficiaries
With more than 60% of Americans finding prescription costs to be a financial burden, the IRA and the Medicare Drug Price Negotiation Program are a major leap towards affordable medication. From November 2023 to October 2024, over five million Part D beneficiaries used the 15 drugs in the second negotiation cycle to manage and treat their health, accounting for around $41 billion in total gross covered prescription drug costs.
Both the drug price negotiation and Part D out-of-pocket cap lower the barriers to access to life-saving medication. By reducing some of the most expensive drugs on the market, the drug price negotiation program can help significantly improve the quality of life of many Part D enrollees like you.
