Wedoany.com Report-Nov. 27, The Centers for Medicare & Medicaid Services (CMS) announced on Tuesday the final negotiated prices for 15 high-cost drugs under Medicare Part D, effective January 1, 2027. These agreements, part of the second annual round of negotiations authorized by the Inflation Reduction Act, will lower Medicare's spending on these medications by billions of dollars.

The Centers for Medicare and Medicaid Services announced final Medicare negotiated prices for semaglutide and 14 other drugs on Nov. 25, 2025.

If the new prices had applied in 2024, CMS estimates they would have reduced total program expenditures by 44 percent, or $12 billion. For Medicare beneficiaries, out-of-pocket costs would have decreased by $685 million during that period. The drugs, used by approximately 5.3 million enrollees last year, address conditions including cancer, diabetes, asthma, respiratory issues, metabolic disorders, gastrointestinal problems, irregular body movements, depression, and psoriasis.

The selected medications include semaglutide, the active ingredient in Novo Nordisk's Ozempic for diabetes management and Wegovy for obesity treatment; diabetes therapies Tradjenta and Janumet; cancer treatments Xtandi, Pomalyst, Ibrance, and Calquence; respiratory options Trelegy, Ofev, and Breo; gastrointestinal products Linzess and Xifaxan; Austedo for movement disorders; Vraylar for depression; and Otezla for psoriasis.

Negotiations involved three phases of offers and counteroffers between CMS and the manufacturers, supported by evidence reviews. CMS reported that seven prices resulted from revised counteroffers by the drugmakers, while the companies accepted CMS's written final offers for the remaining eight.

The process concluded on November 1, 2025, with all participating manufacturers reaching agreements. Eligibility for negotiation targets single-source drugs—typically branded products without generic or biosimilar competition—that rank among Medicare's highest expenditures.

This round builds on the first cycle, where prices for 10 drugs were finalized in 2024 and will take effect in 2026. The Inflation Reduction Act, enacted in 2022, introduced direct price negotiations for Medicare Part D drugs, which has covered pharmacist-dispensed prescriptions since 2006.

The negotiated maximum fair prices represent significant reductions, with semaglutide's price cut by about 71 percent from its 2024 wholesale acquisition cost. CMS emphasized that the outcomes balance affordability for the program and beneficiaries with incentives for ongoing pharmaceutical innovation.

These lower prices apply exclusively to Medicare payments and do not directly alter commercial or other insurance rates. Beneficiaries will continue to benefit from the Part D redesign under the Act, including a 2027 cap on annual out-of-pocket spending at around $2,200, adjusted for inflation.

The initiative supports broader efforts to enhance access to essential treatments while managing program costs. By addressing high-spending, long-marketed drugs, the negotiations help sustain Medicare's financial stability and improve value for enrollees managing chronic conditions.