The U.S. government has finished its second round of drug price negotiations, reaching major discounts on 15 widely used prescription drugs. Some prices will drop by as much as 85 percent. This is a major moment for Medicare, the federal health insurance program for seniors, because it marks one of the first times it has been allowed to negotiate how much it pays for medications. These new lower prices will start on January 1, 2027, and are expected to save millions of Americans hundreds of millions of dollars every year.
The discounts cover drugs for serious health problems such as diabetes, cancer, asthma, and blood disorders. The biggest cuts are for two drugs, Ozempic and Wegovy, known for treating diabetes and aiding in weight loss. Their monthly price will drop from about $1,000 to roughly $274, saving patients more than $8,000 a year. Overall, the 15 drugs will cost Medicare 38 to 85 percent less than before.
If these lower prices had been in place this year, Medicare would have saved about $12 billion just on these medications. About 5.3 million people on Medicare use at least one of these drugs, and each could save an estimated $2,000 or more every year. Seniors are expected to save $685 million annually in out-of-pocket costs.
The Drugs Affected and Why They Matter
The selected medications all treat conditions that are either lifelong or life-threatening and are among the most expensive in the country. One striking example is Janumet, a diabetes medication, which will now cost 85 percent less than before. Others, such as Austedo for Huntington’s disease, will see more modest but still meaningful, price drops.
For years, many of these drugs had no cheaper generic alternatives. That lack of competition allowed their manufacturers to keep prices very high. Cancer treatments and drugs for blood disorders, in particular, have taken up a large portion of Medicare’s prescription budget. With these new lower prices, more patients should be able to take their medications consistently instead of skipping doses or stopping treatment because of cost. This is especially important for those managing serious or long-term illnesses.
Breaking Old Rules to Lower Costs
For two decades, Medicare was blocked by law from negotiating prices directly with pharmaceutical companies. That changed when the Inflation Reduction Act passed in 2022. The new law gave Medicare the power to negotiate drug prices for the first time, introducing a step-by-step rollout. The first batch of 10 drugs will have lower prices starting in 2026, and this second round of 15 drugs will follow in 2027. More medications will be added every year after that.
This change represents a big shift in U.S. health policy. Before this, drug companies had almost total control over what they could charge for medications purchased by the government. Supporters of the new system argue that other wealthy countries have long negotiated lower drug costs, and the United States should do the same.
However, patients will have to wait more than a year before the new prices take effect. Until then, the current, much higher prices remain in place. For seniors living on limited incomes, that waiting period creates financial strain and health risks if they cannot afford to stay on their prescribed treatments.
Industry Pushback and Confusion Over Prices
The situation is further complicated by overlapping price agreements. In November 2025, the Trump administration announced a separate deal with drugmakers Novo Nordisk and Eli Lilly to reduce the cost of GLP-1 drugs, including Ozempic and Wegovy, to $245 a month starting in 2026, one year earlier and slightly cheaper than Medicare’s negotiated rate. It remains unclear which price will ultimately apply when both rules overlap. Drugmakers and health policy experts have called for regulatory clarification, as conflicting agreements could cause confusion among patients and insurers.
Pharmaceutical companies have also fought back against Medicare’s negotiation program. Several have filed lawsuits claiming that forcing lower prices violates their constitutional rights and reduces funds available for research on new treatments. Health economists disagree, arguing that companies still earn large profits even with the new prices, since these discounts only apply to Medicare patients. Private insurance plans and people without insurance will still pay higher prices, ensuring companies continue to make substantial revenue.
Despite these lawsuits, the government’s effort marks one of the most significant policy shifts in decades. Allowing Medicare to negotiate prices could help control overall healthcare costs nationwide and make life-saving drugs more affordable for seniors. Future rounds of negotiations will likely include even more medications, expanding the program’s benefits to millions more patients and reshaping how prescription pricing works in the U.S. healthcare system.
Sources
- Centers for Medicare & Medicaid Services. (2025, November 24). CMS delivers savings for seniors on 15 major drugs. U.S. Department of Health and Human Services. Retrieved from
- CMS Deputy Administrator and Medicare Director Chris Klomp. Statement on Medicare Drug Price Negotiations Program. (2025, November 24). Retrieved from CMS official communications.
- Robert F. Kennedy Jr., Health and Human Services Secretary. (2025, October 29). Remarks on FDA drug approval changes and drug pricing reforms. Retrieved from HHS press room communications.
- Centers for Medicare & Medicaid Services. (2025, November 26). Clarification on most-favored-nation pricing vs. IRA-negotiated prices. CMS Statement on GLP-1 drug pricing. Retrieved from CMS newsroom.