On January 1, 2027, the second batch of Medicare-negotiated drug prices takes effect, cutting list prices on 15 widely used Part D medications by as little as 38 percent and by more than 80 percent for several others. The discounts apply to drugs ranging from the diabetes and weight-loss medication Ozempic to the prostate-cancer drug Xtandi, covering roughly 5.3 million of Medicare’s 53 million Part D enrollees. Which beneficiaries actually see a lower bill at the pharmacy, though, depends on where they sit inside the redesigned three-phase Part D benefit, not just which drug they take.
Fifteen Drugs, One Fixed Price Beginning New Year’s Day
The Centers for Medicare & Medicaid Services selected these 15 drugs for the second round of negotiation in January 2025, based on which Part D medications cost the program the most between November 2023 and October 2024, then spent the rest of 2025 negotiating directly with each manufacturer. The negotiation period closed November 1, 2025, with agreement reached on all 15 drugs.
The agreed-upon prices, published by CMS in November 2025, take effect January 1, 2027, and range from a 38 percent discount off the 2024 list price for the Huntington’s-disease drug Austedo to an 84 percent discount for the type 2 diabetes drug Tradjenta, with the diabetes drug Janumet cut by a comparably steep margin, from $526 to $80 for a 30-day supply.
The list also includes Trelegy Ellipta and Breo Ellipta for asthma and COPD, the cancer drugs Xtandi, Pomalyst, Ibrance and Calquence, the bowel and constipation drugs Linzess and Xifaxan, the psychiatric drug Vraylar, and Otezla for psoriasis and Behçet’s disease — a group that accounted for $42.5 billion in Part D drug spending and $1.7 billion in beneficiary out-of-pocket costs in 2024 alone. Manufacturers must make the negotiated price available to Part D plans and pharmacies once it takes effect, and every affected plan must include the drug in its formulary.
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Why Some Drugs Got a Deeper Cut Than Others
CMS built the list by first identifying single-source drugs without generic or biosimilar competition for at least seven years, then ranking the remaining eligible drugs by total Part D spending after excluding orphan drugs, low-spending drugs, plasma-derived products, and drugs granted a small-biotech exception. Once the 15 were set, federal law required CMS to negotiate each price using specific factors: a manufacturer’s research and development costs, any prior federal financial support for developing the drug, unit production and distribution costs, and evidence about therapeutic alternatives already competing on the market. For eight of the 15 drugs, CMS and the manufacturer reached agreement through a counteroffer exchanged during negotiation meetings; for the other seven, the manufacturer accepted a final written offer from CMS rather than negotiate further.
That process explains the spread in discounts. Austedo, prescribed for Huntington’s-disease chorea and tardive dyskinesia with few close substitutes, received the smallest cut in the group. Tradjenta and Janumet, both older type 2 diabetes pills competing against several other treatments already on the market, saw among the steepest reductions, and Breo Ellipta’s price for asthma and COPD fell 83 percent, from $397 to $67 for a 30-day supply.
Ozempic, Rybelsus and Wegovy together were the single largest driver of Part D spending among the 15 drugs, at more than $15 billion in 2024, and their negotiated price for a 30-day supply falls from $959 to $274, a 71 percent reduction that alone is expected to touch more Part D enrollees than any other drug on the list.
How the Lower Price Reaches the Pharmacy Counter Inside the 2027 Benefit
Medicare’s Part D benefit runs in three phases each year under the redesign that took effect in 2025: an annual deductible phase, an initial coverage phase where the enrollee generally pays 25 percent coinsurance while the plan and manufacturer cover the rest, and a catastrophic phase that ends a beneficiary’s cost-sharing for the remainder of the year once the annual out-of-pocket threshold is reached. A beneficiary taking one of the 15 negotiated drugs during the deductible or initial coverage phase pays a share of the new, lower price rather than the old list price, so the savings show up immediately at the counter.
Someone who has already reached the catastrophic phase, where cost-sharing drops to zero for the rest of the plan year, will not notice a change in what they personally pay from the negotiation alone — the benefit there comes from lower spending by the plan and by Medicare itself, which helps hold down the costs that premiums are built on. Coverage works the same way whether the beneficiary is in a standalone Part D plan or a Medicare Advantage plan with drug coverage, since both are required to carry the negotiated price once it takes effect.
A third round of negotiations, covering drugs whose lower prices would take effect in 2028, is already underway on a similar timeline, with CMS having issued final guidance for that cycle in September 2025 — a reminder that the fixed prices arriving January 1 are the second step in an annual process, not a one-time event.
What Else Goes Unfiled
A negotiated price only changes what a drug costs before any other assistance is applied. Medicare’s Extra Help program can separately erase a Part D premium and deductible and cap many generic drugs near $5 a month for beneficiaries who qualify by income and resources, regardless of which of the 15 negotiated drugs a plan covers. Millions of beneficiaries who likely qualify for that second layer of savings have never filed for it.
A 69-page benefits guide lays out all 11 programs, including Extra Help and the Medicare Savings Programs, alongside the 2026 income limits for each and a 50-state phone directory for finding the right office to call.
Look up where Extra Help and the other program limits stand in The Benefits Checklist.
This article was researched and drafted with AI assistance and reviewed against primary sources before publication.
