The Centers for Medicare & Medicaid Services (CMS) announced significant price reductions for 15 high-cost Medicare Part D drugs, including treatments for cancer (Ibrance, Xtandi, Pomalyst), diabetes (Ozempic, Janumet), and lung/heart conditions (Ofev, Trelegy), with new negotiated prices taking effect January 1, 2027, aiming for massive savings (38% to 85%) for seniors via the Inflation Reduction Act’s negotiation program. These cuts, part of the second negotiation cycle, reflect a substantial $12 billion savings in Medicare spending and aim to reduce out-of-pocket costs for millions of beneficiaries.
Maximum Fair Prices (MFPs) for these 15 drugs will take effect January 1, 2027, bringing the total number of negotiated drugs to 25 when combined with the 10 drugs (see our story on the First 10 Drugs Negotiated by Medicare) which begins January 1, 2026. Between January 1 and December 31, 2024, about 5.3 million Part D enrollees used these 15 drugs, which accounted for roughly $42.5 billion (about 15%) of gross covered Part D costs. The newly negotiated prices are expected to lower out-of-pocket costs at the pharmacy counter for beneficiaries while also producing substantial savings for the Medicare program and supporting its long-term sustainability.