Fifteen high-cost Medicare Part D drugs, among them the diabetes and weight-loss medicines Ozempic and Wegovy, will carry lower government-negotiated prices starting January 1, 2027. The Centers for Medicare and Medicaid Services set these maximum fair prices in the program’s second negotiation cycle, targeting medicines that together accounted for tens of billions of dollars in annual spending. The change matters because it resets what the Medicare program pays drugmakers, but the amount an individual enrollee actually spends at the counter depends on a separate layer of plan design that the negotiation does not control.
The 15 Drugs and the Prices Medicare Set
The second round targets some of the highest-spending medicines in Part D, spanning treatments for diabetes, cancer, asthma and other chronic conditions. CMS announced net savings of about 44 percent off the prior year’s negotiated Medicare spending on the group, framing the cuts as the largest reductions on the most widely used drugs.
The single most visible price is on the Novo Nordisk semaglutide products. Ozempic and Wegovy will carry a maximum fair price of about $274 for a 30-day supply, down from a list price near $959, a roughly 71 percent reduction. That figure is the ceiling on what Medicare will pay for the drug, and it applies uniformly across the program once the prices take effect at the start of 2027.
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How Much Enrollees Might Actually Save
The scale of the affected population depends on how it is counted. AARP estimates the lower prices could reach roughly 11 million Medicare enrollees who use these medicines, while CMS reported that about 5.3 million people with Part D coverage filled a prescription for at least one of the 15 drugs during 2024. The two figures measure slightly different things, but both point to a benefit spread across millions of beneficiaries rather than a niche group.
In dollar terms, CMS reported that the 15 drugs accounted for about $42.5 billion in gross covered Part D costs in 2024, and the agency projects an estimated $685 million in out-of-pocket savings for beneficiaries once the negotiated prices apply under the standard benefit design. That out-of-pocket figure is the number closest to what enrollees experience directly, though it is an aggregate estimate rather than a promise to any single person.
Why the Sticker Price Is Not the Copay
The most important caveat is structural. A maximum fair price governs the transaction between Medicare and the manufacturer; it is not the copay a beneficiary pays at the pharmacy. What a person actually owes still runs through their specific Part D plan, its formulary tier for the drug, the deductible, and where the person sits in the year’s spending phases. Two enrollees on the same medication can pay different amounts because they hold different plans.
One backstop does cap exposure regardless of plan. Part D now carries an annual out-of-pocket maximum, so a beneficiary’s total yearly drug spending is limited even when a particular medicine’s copay is high. That ceiling and the negotiated prices work in tandem, but they operate on different levers: the negotiation lowers the underlying cost, while the out-of-pocket cap limits how much any enrollee can be charged across all covered drugs in a year.
The negotiated price also reshapes the flow of money behind the counter rather than only the amount a patient pays. Under the program, manufacturers must make the maximum fair price available for the selected drugs, and pharmacies dispense at that lower rate with the difference reconciled through the program’s payment mechanism. For the enrollee, the practical effect is that the plan’s cost-sharing is calculated against a smaller underlying price, which can pull down coinsurance that is set as a percentage even where a fixed copay would not move.
A Program Building on Its First Cycle
This is the second group of drugs to go through negotiation, following an initial cycle whose prices took effect at the start of 2026 and which survived a series of legal challenges from manufacturers. KFF’s analysis of the program notes that the authority to negotiate applies only to selected high-spend drugs that have been on the market for years without generic or biosimilar competition, which is why the lists concentrate on established, expensive medicines rather than new entrants. Each cycle adds more drugs, expanding the share of Part D spending subject to a negotiated ceiling.
The staggered structure means the savings compound over time rather than arriving all at once. The first cycle’s lower prices are already in force, the second cycle’s fifteen drugs join them on January 1, 2027, and a third cycle has been selected to follow. Because the program keeps drugs under a negotiated price once they are chosen, the cumulative effect on Part D spending grows with each round, which is the mechanism through which a policy aimed at a short list of medicines gradually reaches a larger portion of the program.
For an older adult who takes one of the 15 medicines, the practical question for 2027 is not whether Medicare’s price fell but whether their own plan translates that lower price into a smaller copay. The negotiation guarantees the first and merely enables the second, so comparing plans during open enrollment, with the specific drug and its tier in view, is what determines the personal result.
The larger significance is that a policy long debated in the abstract now produces concrete price cuts on medicines millions of people take, including the semaglutide drugs that had become emblematic of high pharmaceutical costs. The savings are real at the program level; how much of them reach any given kitchen table still depends on the plan that beneficiary chose.
This article was researched and drafted with the assistance of artificial intelligence.
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