Latest Medicare pricing cuts promise $12bn in savings
The Centers for Medicare and Medicaid Services (CMS) has revealed the prices for the second batch of 15 drugs going through Medicare's negotiation process, promising a 44% cut that will save around $12 billion on the products.
The new maximum fair prices (MFPs), due to come into effect on 1st January 2027, will bring down the cost of drugs that are among those that cost Medicare the most to bring to patients, and include 15 therapies for cancer, diabetes, asthma, weight loss, and other conditions.
The list reveals hefty reductions in the list prices of the drugs, ranging between 38% and 85% for a 30-day supply compared to 2024, and covers the following previously announced medicines:
- Novo Nordisk's Ozempic/Rybelsus/Wegovy (semaglutide) for diabetes and weight loss – down 71% to $274;
- GSK's respiratory drug Trelegy Ellipta (fluticasone/umeclidinium/vilanterol) – down 73% to $175;
- Astellas' prostate cancer drug Xtandi (enzalutamide) – down 48% to $7,004;
- Bristol Myers Squibb's Pomalyst (pomalidomide) for multiple myeloma and Kaposi sarcoma – down 60% to $8,650;
- Pfizer's breast cancer drug Ibrance (palbociclib) – down 50% to $7,871;
- Boehringer Ingelheim's Ofev (nintedanib) for pulmonary fibrosis – down 50% to $6,350;
- AbbVie and Ironwood Pharmaceuticals' constipation treatment Linzess (linaclotide) – down 75% to $136;
- AstraZeneca's chronic lymphocytic leukaemia therapy Calquence (acalabrutinib) – down 40% to $8,600;
- GSK and Theravance's asthma therapy Breo Ellipta (fluticasone furoate/vilanterol) – down 83% to $67;
- Teva's Austedo/Austedo XR (deutetrabenazine) for chorea in Huntington disease and tardive dyskinesia – down 38% to $4,093;
- Salix Pharmaceuticals' irritable bowel syndrome drug Xifaxan (rifaximin) – down 63% to $1,000;
- AbbVie's antidepressant Vraylar (cariprazine) – down 44% to $770;
- Boehringer Ingelheim's diabetes therapy Tradjenta (linagliptin) – down 84% to $78;
- Merck KGaA's Janumet/Janumet XR (sitagliptin/metformin) for diabetes – down 85% to $80; and
- Amgen's psoriasis drug Otezla (apremilast) – down 65% to $1,650.
They now join the first list of 10 medicines from the first round of Medicare negotiations whose price reductions are due to come into effect on 1st January 2026 and are predicted to save around $6 billion.
According to the CMS, about 5.3 million people with Medicare Part D coverage used these drugs last year, with Novo Nordisk's semaglutide-based trio costing the programme the most, at $15.1 billion, followed by Trelegy Ellipta at $5.3 billion and Xtandi at $3.4 billion. A table including all the CMS figures can be seen here (PDF).
CMS said the 2027 reductions also mean that Medicare recipients will save an estimated $685 million in out-of-pocket costs.
Medicare drug price negotiation was introduced under the Inflation Reduction Act, which former President Joe Biden signed into law in 2022, and is still being challenged in the courts.
"This year's results stand in stark contrast to last year's," said CMS Administrator Mehmet Oz in a statement. "Using the same process with a bolder direction, we have achieved substantially better outcomes for taxpayers and seniors."
Medicare negotiation is just one lever being used by the Trump administration to reduce medicine prices, along with a new Most Favoured Nation (MFN) policy – now also being piloted for Medicaid – and the threat of tariffs on imports into the US.
Photo by Towfiqu barbhuiya on Unsplash
