Medicare’s second round of drug price negotiations under the Inflation Reduction Act closed November 1, 2025, when the Centers for Medicare & Medicaid Services finished a year of offers and counteroffers with 15 drug manufacturers, with the agreed prices set to take effect January 1, 2027. The list carries outsized financial weight: those 15 drugs alone accounted for $42.5 billion of Medicare Part D’s total gross covered prescription drug costs in calendar year 2024, about 15 percent of everything the program spent on covered medicines that year. Roughly 5.3 million of Medicare’s 53 million Part D enrollees used at least one of them.
Why 15 Drugs Carry 15 Percent of Part D’s Drug Spending
The concentration inside the list is sharper than the headline share suggests. Novo Nordisk’s Ozempic, Rybelsus and Wegovy franchise alone accounted for $15.16 billion of the $42.5 billion in calendar-year 2024 Part D costs behind these 15 drugs, more than a third of the entire group’s spending, and was used by 2.28 million enrollees. GlaxoSmithKline’s Trelegy Ellipta followed at $5.3 billion. From there the totals drop off fast: prostate-cancer treatment Xtandi and multiple-myeloma drug Pomalyst each cleared roughly $2 billion, while psoriasis treatment Otezla, the smallest entry on the list, accounted for just over $1 billion.
The $42.5 billion figure covers calendar year 2024 exactly, but CMS used a different window, November 2023 through October 2024, to decide which drugs made the list in the first place. That period showed these same 15 drugs at $40.7 billion, or 14 percent of Part D drug spending — the ranking, not the pricing impact, was fixed to that earlier snapshot. Combined with the roughly $60 billion in the same window attributable to the ten drugs from the program’s first negotiation cycle, the two negotiated lists together represented 36 percent of everything Medicare Part D spent on covered prescription drugs during that twelve-month stretch.
Beneficiaries felt that concentration directly. People with Part D coverage spent $1.7 billion out of their own pockets on these 15 drugs in 2024, before any negotiated price applied, spread across the 5.3 million people who filled at least one of the prescriptions, with costs ranging from inhaler copays to several-thousand-dollar cancer treatments in a single month.
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How CMS Narrowed the Field to These 15 High-Cost Drugs
The Inflation Reduction Act specifies a mechanical process for choosing negotiation targets, not a judgment about which conditions matter most. CMS first identifies single-source drugs without generic or biosimilar competition — small-molecule drugs at least seven years past FDA approval, biologics at least eleven — then excludes orphan drugs, low-spending drugs and plasma-derived products. The remaining pool is ranked by total Part D gross covered cost, and the 15 highest spenders that survive further exclusions, including a “Small Biotech Exception” that four drug companies qualified for this cycle, become the selected list. CMS confirmed all 15 would have qualified even without a separate biosimilar-delay adjustment factored in.
That mechanism explains why the second cycle’s total, $42.5 billion, actually trails the roughly $60 billion in Part D spending the first cycle’s ten drugs represented over the same stretch of months. Cost ranking, not drug count, drives selection, and the highest-grossing single-source drugs happened to cluster more heavily in the program’s first list. The first cycle’s negotiated prices took effect January 1, 2026, projected to save enrollees $1.5 billion out of pocket; the second cycle’s prices, covering five more drugs but less total spending, are projected to save $685 million once they start in 2027.
The negotiations followed a fixed statutory calendar that closed without exception on schedule. CMS sent initial price offers to all 15 companies by June 1, 2025, and companies had 30 days to counter. Eight drugs settled on a negotiated price during summer and fall negotiation meetings or through additional written exchanges; for the remaining seven, CMS issued a final offer that each company accepted rather than reject. The negotiation period closed November 1, 2025, the date the Centers for Medicare & Medicaid Services and manufacturers reached agreement on all 15 prices.
What the Discounts Look Like When They Take Effect in 2027
The negotiated prices cut list prices anywhere from 38 percent to 85 percent depending on the drug. Novo Nordisk’s Ozempic, Rybelsus and Wegovy franchise drops from a $959 list price for a 30-day supply to $274, a 71 percent reduction, while Merck’s Janumet falls from $526 to $80, an 85 percent cut, the steepest on the list. Prostate-cancer drug Xtandi, priced at $13,480 for a 30-day supply in 2024, will cost $7,004 under the negotiated price, a 48 percent reduction that still leaves it with the highest dollar price of the 15.
CMS estimates the discounts would have cut net Medicare spending on these 15 drugs by $12 billion in 2024, about 44 percent, had the negotiated prices already applied that year; including Coverage Gap Discount Program spending narrows that figure to an estimated $8.5 billion, or 36 percent. For beneficiaries directly, the agency projects $685 million in aggregate out-of-pocket savings once the prices take effect in 2027, spread across the millions of people who fill these prescriptions each year.
The prices are not fixed once and forgotten. Under the statute, each negotiated price carries forward year over year, adjusted only by the change in the Consumer Price Index for all urban consumers, unless CMS and the manufacturer renegotiate it. That structure means the $42.5 billion in 2024 spending behind this list does not simply reset once 2027 pricing begins; it becomes the baseline against which every future increase on these 15 drugs is measured, for as long as each drug remains subject to the program.
CMS has already moved to the next round: final guidance for a third negotiation cycle, covering drugs with prices effective in 2028, published September 30, 2025, with negotiations running through 2026. Whether that list produces the same lopsided concentration — a handful of blockbuster drugs accounting for a disproportionate share of a fifteen-drug group’s spending, the way the Ozempic franchise alone covers more than a third of this list — is not yet public. The pattern across the first two cycles suggests it will, since the statute selects by total cost, not by how evenly that cost is spread.
This article was produced with AI assistance and reviewed by The Money Overview editorial team.
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