Trump Administration Secures Billions in Medicare Drug Price Negotiations

Former President Donald Trump‘s administration has finalized deep price cuts for 15 critical prescription drugs covered by Medicare. The negotiated discounts, a core provision of the Biden-era Inflation Reduction Act, are projected to save the program and seniors billions of dollars. This move represents a significant political reversal, with Republicans now championing a policy they once uniformly opposed.

The second round of Medicare price negotiations has concluded with even steeper reductions than the first. According to administration officials, the new prices will save an estimated $8.5 billion, a 36% reduction compared to last year’s costs. The discounts range from 38% to 85% off current list prices and are set to take effect in 2027.

Savings Target Popular Diabetes and Cancer Medications

The list of drugs includes some of the most expensive and commonly used medications for seniors. Popular GLP-1 drugs for diabetes and weight loss, such as Ozempic and Wegovy, are prominently featured. Prices for these will fall dramatically, from nearly $960 per month to about $274.

Several costly cancer therapies are also included. The price for prostate cancer drug Xtandi will drop from over $13,000 to just above $7,000. Other medications for asthma, arthritis, and heart failure saw similar substantial cuts. These changes are expected to directly lower out-of-pocket costs for millions of Medicare Part D enrollees.

A Notable Shift in Political Strategy and Policy

This development marks a stark departure from previous Republican rhetoric. The party fiercely criticized the Inflation Reduction Act’s price negotiation provisions as “socialist price controls” that would harm innovation. Now, the Trump administration is proudly implementing them and claiming superior results.

The political calculus appears to have shifted. With seniors facing high drug costs, opposing popular measures that provide tangible savings carries electoral risk. Advocacy groups note it may now be politically difficult for the GOP to try to repeal these popular negotiations. Democrats, meanwhile, continue to claim credit for passing the enabling law.

The pharmaceutical industry remains opposed. Groups like PhRMA argue government price setting threatens future drug development. Several lawsuits challenging the program’s legality are still pending in courts. Some drugmakers have pursued separate, voluntary discount deals with the administration outside the formal negotiation process.

Thought you’d like to know

Which drugs had their prices negotiated?

The list includes Ozempic, Wegovy, and Rybelsus for diabetes, along with cancer drugs Xtandi and Pomalyst. Asthma treatment Trelegy Ellipta and psoriasis drug Otezla were also part of the negotiations.

How much will seniors save?

Out-of-pocket savings for Medicare beneficiaries are projected to reach $685 million. Furthermore, a separate IRA rule caps total annual drug costs at $2,000 for seniors starting in 2025, providing additional financial protection.

When do the new prices start?

The prices negotiated in this second round will not take effect until 2027. The prices from the first round of negotiations, covering 10 different drugs, are scheduled to begin in January 2026.

Why did Republicans support this now?

Facing pressure over high consumer costs, the administration embraced the popular policy. Claiming credit for delivering savings to seniors became a more attractive political position than opposing the negotiations outright.

Are there legal challenges to this?

Yes. Pharmaceutical companies and industry groups have filed multiple lawsuits arguing the price negotiation program is unconstitutional. These cases are working their way through the federal court system.

What happens in the next round?

Medicare will begin negotiating prices for another 15 drugs in 2025. This next phase will include physician-administered medications for the first time, further expanding the program’s reach.