The Trump administration has negotiated lower prices for 15 widely used medications covered by Medicare, with the federal government saying the effort will cut spending on those drugs by 44%, or about $12 billion. So will the initiative help save money for seniors?
That’s less clear, given that Medicare enrollees are already protected by a cap on drug costs. But the Centers for Medicare and Medicaid Services (CMS) said Monday the new prices will save the 55 million people enrolled in the Part D pharmaceutical plan a total of about $685 million.
Individuals’ out-of-pocket reductions are likely to vary based on whether they use one or more of the drugs covered under the new agreement and if they’ve reached their annual spending cap. On average, however, with 5.3 million people using the newly discounted drugs, that equates to savings of roughly $129 per Medicare enrollee.
CMS didn’t immediately respond to a request for comment about the projected individual savings under the new Medicare pricing plan.
The lower drug prices were arranged through the Inflation Reduction Act, which included a measure to negotiate prices for some of Medicare’s most expensive drugs. Before the 2022 law, Medicare was prohibited from negotiating with pharmaceutical firms to secure more favorable drug prices for participants in the government health program.
Under the new agreement, lower prices for the 15 drugs will take effect in 2027 for medications bought through Medicare’s Part D prescription plan, CMS said. The discounts will range from 38% to 85% off the medications’ list prices, according to the agency.
The best-known drugs covered by the agreement include Novo Nordisk’s Ozempic and Wegovy, popular medications used for diabetes treatment and weight loss, while other drugs on the list are used to treat common diseases such as asthma and prostate cancer.
The cost of prescription drugs ranks among the top concerns of seniors, according to AARP.
Starting in 2025, the Inflation Reduction Act also introduced a $2,000 out-of-pocket spending cap for seniors. Because that spending limit is adjusted annually for inflation, it could reach about $2,200 in 2027 based on current trends. Medicare enrollees pay nothing for covered prescriptions above that amount. In other words, the negotiated prices for the 15 drugs could help seniors lower their costs until they hit that threshold.
About 5.3 million people with Medicare Part D coverage used the 15 drugs to treat diseases such as diabetes and asthma, CMS said. The medications account for $40.7 billion in spending in Medicare Part D.
Aside from savings that individuals might see on their prescriptions, the lower drug pricing will benefit Medicare itself, Merith Basey, executive director of Patients For Affordable Drugs, an advocacy group for lowering prescription costs, told CBS News.
“Medicare is using its bargaining power to lower prices on the most expensive drugs covered by the program,” Basey said. “The savings gained from the new, lower negotiated prices are what allow the program to pay for the out-of-pocket cap.”
The program’s ability to negotiate drug costs also represents “the most powerful tool we currently have in place to rein in drug prices and hold the pharmaceutical industry accountable,” she added.
Medicare’s negotiations are separate from deals negotiated by President Trump to lower prices for Zepbound, Ozempic and Wegovy, announced earlier this month. Under that agreement — which covers eligible patients on Medicare, Medicaid and the planned TrumpRX pharmaceutical website — the monthly cost of the GLP-1 drugs will range from $245 to $350, down from as high as $1,350 per month.
However, the price for Medicare enrollees for Wegovy and Ozempic under the earlier deal will be $245, less than the $274 negotiated by CMS. In Monday’s announcement, CMS didn’t specify how the two programs might work together, and the agency didn’t immediately respond to a request for comment.
