Roughly 5.3 million people with Medicare Part D coverage filled at least one of the 15 drugs selected for the second round of Medicare’s price negotiations in 2024, according to the government’s own tally of who actually uses these medicines. Those prescriptions accounted for $42.5 billion in total Part D spending and $1.7 billion paid directly by beneficiaries out of pocket that year alone. When the negotiated prices take effect on January 1, 2027, the Centers for Medicare & Medicaid Services projects the change will save beneficiaries an estimated $685 million in out-of-pocket costs.
Who Actually Uses These 15 Drugs
The usage figures come from CMS’s own accounting of 2024 claims data, the most recent full year available when the agency calculated the second cycle’s negotiated prices. The full list of fifteen drugs includes Ozempic, Wegovy and Rybelsus for diabetes and weight management alongside cancer treatments like Ibrance and Pomalyst, the psoriasis drug Otezla, the inflammatory bowel disease drug Xifaxan, and several others spanning cardiology, psychiatry and respiratory care.
The $42.5 billion in gross spending is not evenly distributed across the fifteen drugs; costlier specialty medications like Ibrance and Calquence carry list prices in the tens of thousands of dollars annually for a relatively small patient population, while a maintenance drug like Ozempic sees far higher prescription volume at a lower per-fill cost spread across millions of people managing diabetes. What ties the group together is not the size of any single drug’s spending but the fact that all fifteen have gone years without generic or biosimilar competition, which is the statutory trigger that made them eligible for negotiation under the Inflation Reduction Act in the first place.
This second round follows the program’s first cycle, which set negotiated prices for ten different drugs effective in 2026. Combined, the first and second cycles mean 25 drugs will carry government-negotiated prices by the start of 2027, a scale of federal price-setting in Medicare that did not exist before the Inflation Reduction Act passed in 2022 and that continues to expand each year as CMS selects a new group of drugs for each cycle.
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Where the $685 Million in Projected Savings Comes From
CMS calculates the $685 million figure by modeling how the negotiated prices would have changed 2024 spending patterns had they already been in effect, then projecting that difference forward under the redesigned Part D benefit that took effect in 2026. The savings accrue through the same deductible-coinsurance-catastrophic structure that applies to every Part D drug, meaning a beneficiary’s actual savings depend heavily on which phase of the benefit year they are in when they fill a prescription for one of the fifteen drugs.
The estimate assumes beneficiaries continue filling these drugs at roughly the same rate they did in 2024, an assumption that could understate the total once lower prices make some of the fifteen drugs more affordable to beneficiaries who previously rationed doses or skipped fills. CMS has not published a beneficiary-by-beneficiary breakdown of how the $685 million will be distributed, so the figure functions as a program-wide estimate rather than a guarantee for any individual filling one of these prescriptions.
Financing the lower prices doesn’t fall solely on manufacturers. Under the Part D redesign, CMS pays sponsors a subsidy equal to ten percent of a selected drug’s negotiated price during the phase before a beneficiary reaches the annual out-of-pocket threshold, a mechanism designed to keep plan sponsors from raising premiums to offset the lower prices they collect from manufacturers. That subsidy is separate from the $685 million in beneficiary savings and represents a second, larger transfer moving through the system alongside it.
What Changes for a Beneficiary Starting January 1
A beneficiary who currently fills one of the fifteen drugs will not need to do anything to receive the lower price; the negotiated maximum fair price applies automatically at the pharmacy counter through whatever Part D plan or Medicare Advantage prescription drug plan the person is already enrolled in, without a new application, a renewed prior authorization, or a change in physician paperwork. Plans are required to include every selected drug on their formulary once a negotiated price is in effect, closing off the option some plans previously used to drop an expensive drug from coverage entirely rather than negotiate their own rebate with the manufacturer.
The requirement does not freeze formulary tiers in place — a plan can still move a negotiated drug to a different cost-sharing tier relative to other drugs, which affects how much of the deductible or coinsurance a beneficiary pays before reaching the $2,100 out-of-pocket cap. Beneficiaries who want to confirm how a specific drug will be priced under their plan in 2027 will need to wait for each plan’s annual notice of change, typically mailed each September ahead of open enrollment.
CMS has signaled it will continue selecting roughly 15 additional drugs for negotiation each year, meaning the population affected by negotiated pricing will keep growing well past the 5.3 million beneficiaries counted for this second round alone.
Whether the $685 million estimate holds up will not be clear until CMS publishes full 2027 claims data sometime in 2028, the same multi-year lag that separated the 2024 usage figures used to calculate this cycle’s savings from the prices actually taking effect three years later. For now, the number stands as the government’s own projection of total spending 5.3 million people are expected to avoid, not a personal guarantee for any single beneficiary — a projection that, barring a successful legal challenge to the negotiation program itself, is no longer contingent on anything happening between now and January 1, 2027.
This article was drafted with AI assistance and edited for accuracy.
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