From AARP – By Tony Pugh –
Newly announced savings on 15 high-cost medications include popular Ozempic family of weight-loss drugs
Fifteen additional expensive and widely used prescription drugs will have lower negotiated prices for Medicare beneficiaries in 2027, the federal government announced late Tuesday.
About 5.3 million beneficiaries use these medications, which account for $40.7 billion in Medicare Part D spending, to treat common conditions such as asthma, cancer, chronic obstructive pulmonary disease (COPD) and diabetes.
The lower prices, expected to save an estimated $8.5 billion to $12 billion a year, were negotiated this year between drug companies and the Centers for Medicare & Medicaid Services (CMS). When they take effect Jan. 1, 2027, the reduced prices must be made available to eligible Medicare beneficiaries and must be included among the covered drugs for all stand-alone Part D drug plans available for people in original Medicare and Medicare Advantage prescription drug plans.
Medicare beneficiaries enrolled in Part D plans will save about $685 million in out-of-pocket costs.
“Older Americans across the political spectrum consistently say lower drug prices are a top priority, and these negotiated prices will bring meaningful relief to millions of people on Medicare,” says Dr. Myechia Minter-Jordan, AARP’s CEO. “We thank the administration for ensuring Medicare’s ability to negotiate lower drug prices is protected so older Americans benefit for decades to come.”
Medicare’s second negotiations to lower prices
The 15 medications constitute the second round of price reductions under a 2022 prescription drug law, backed by AARP, that allows Medicare to negotiate lower drug prices for its beneficiaries.
The first round of Medicare drug price negotiations in 2024 produced lower prices, which take effect in 2026, for 10 medications. As a result, Part D enrollees are expected to save $1.5 billion in out-of-pocket costs next year.
The 25 drugs selected for price negotiations in total represent a third of Medicare Part D spending on prescription medications, health officials say.
“AARP applauds CMS for standing firm and using Medicare’s buying power to lower drug prices for older Americans. These negotiations are saving billions and helping millions afford the medications they need to stay healthy,” says Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer.
“The fight isn’t over. Drug companies are spending millions to weaken this law,” she says. “As the voice for 125 million Americans age 50 and over, AARP will keep pushing to ensure full implementation and lasting relief. Lower drug prices mean healthier lives and stronger budgets, and we’re committed to making that permanent.”
Some GLP-1s to see major price cuts
The latest 15 Part D drugs were selected from the top 50 Part D drugs eligible for negotiation that have the highest total Medicare expenditures.
The list includes the popular GLP-1s Ozempic, Rybelsus and Wegovy that use semaglutide as their same active ingredient and treat cardiovascular disease, type 2 diabetes and obesity. About 2.3 million Medicare Part D enrollees used the medication from November 2023 through October 2024, and Medicare spent $14.4 billion on the medications.
Earlier this month, the White House announced a deal with drug manufacturers Eli Lilly and Novo Nordisk that is expected lower prices for their GLP-1 medications in 2026. The administration also said it is creating a pilot program that would, for the first time, make the drugs available through Part D for weight management.
AARP-backed law is behind historic price negotiations
The 2022 prescription drug law, which AARP strongly supported, contains several provisions designed to reduce prices and related out-of-pocket costs, including finally allowing Medicare to negotiate with companies.
For 2028, up to 15 Part D- or Part B-covered drugs will be selected for price negotiation. Up to 20 additional drugs covered under Part D or Part B could be selected for price negotiations for 2029 and later years. The number of drugs with negotiated prices will continue to grow over time.
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