On November 25, 2025, the Centers for Medicare and Medicaid Services announced negotiated prices for a second round of high-cost prescription drugs, and the reductions are steep. Fifteen medicines widely used by older Americans, including the diabetes and weight-management drugs Ozempic and Wegovy, will carry new maximum fair prices that take effect on January 1, 2027, with cuts ranging from 38 percent to 85 percent off previous list prices. Roughly 5.3 million Medicare beneficiaries fill prescriptions for the drugs on the list, making this one of the broadest price actions the program has ever taken.
The fifteen drugs and how far their prices fall
The selected drugs treat some of the most common and expensive conditions in later life, from diabetes and cardiovascular disease to obesity and chronic inflammation. The headline reductions are large. The semaglutide products Ozempic and Wegovy are set to fall by about 71 percent, the diabetes combination drug Janumet by roughly 85 percent, and Tradjenta, another diabetes medicine, by about 84 percent. Even at the low end of the range, a 38 percent cut represents a substantial change from the prices these drugs command today.
An analysis of the Medicare drug price negotiation program shows that this second group builds on a first round of ten drugs whose negotiated prices are scheduled to begin in 2026. Together the two rounds concentrate on medications that account for an outsized share of Medicare spending, which is why the government targeted them first.
The presence of Ozempic and Wegovy is especially notable given how quickly demand for those drugs has grown. Semaglutide has moved from a diabetes treatment to a mainstay of weight management, and its high price has strained both patients and the program. A cut of roughly 71 percent on such a heavily used medicine signals how much leverage the negotiation process is meant to carry.
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How the negotiation program reached this point
The authority behind the price cuts came from the 2022 Inflation Reduction Act, which for the first time allowed Medicare to negotiate directly with manufacturers over the price of certain high-spending drugs. Before that law, the program was barred from bargaining and paid prices set by the drugmakers. The Centers for Medicare and Medicaid Services selects eligible drugs each year based on how much Medicare spends on them and how long they have been on the market without generic or biosimilar competition.
The negotiated figure is called a maximum fair price, the ceiling a plan pays for the drug under Part D, the prescription-drug side of Medicare. Manufacturers that participate agree to make the drug available at or below that price. Several drugmakers have challenged the program in court, arguing the process is coercive and unconstitutional, and that litigation has continued even as the announced prices move toward their effective date.
The program is designed to expand over time. Each year brings a new set of selected drugs, gradually widening the list of medicines whose prices Medicare negotiates rather than accepts. Each round also sets a reference point that can shape how manufacturers price newer drugs entering the market, extending the effect beyond the specific medicines named. The second round of fifteen is therefore not an endpoint but a step in a process meant to reach deeper into the program’s drug spending in the years ahead.
What lower prices mean for out-of-pocket costs
For beneficiaries, the effect works alongside another recent change. Part D now caps what an enrollee pays out of pocket for covered drugs each year, so once a person hits that ceiling, covered prescriptions cost nothing more for the rest of the year. Lower negotiated prices mean enrollees can reach that cap more slowly and the program spends less on each fill, savings that can flow to both the government and the people filling prescriptions. Coverage details for the drug benefit are maintained on the program’s site at Medicare.gov.
The broader stakes reach beyond the individuals filling these prescriptions. Because Medicare spends heavily on the selected drugs, lower negotiated prices are projected to reduce federal drug spending over time, easing pressure on a program that covers tens of millions of people. Supporters frame the cuts as overdue relief for patients who have watched list prices climb for years, while manufacturers warn that squeezing revenue on top-selling medicines could affect future research. That disagreement, still playing out in court and in policy debate, will help decide how far the negotiation program ultimately extends.
The changes are scheduled, not yet in force, and the January 2027 start date leaves room for the ongoing court fights and any administrative adjustments to shape the final rollout. The open question is how much of the reduction beneficiaries will feel directly at the pharmacy counter, since that depends on individual plan design, and how manufacturers will respond to a program that now sets prices for some of the best-selling medicines in the country. What is clear is the scale: fifteen widely used drugs, millions of patients, and reductions large enough to reset the economics of a major slice of Medicare’s drug spending.
This article was produced with AI assistance and reviewed against primary sources by The Money Overview editorial team.
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