The US Medicare health system will save approximately $12 billion, or 44%, on 15 high-cost drugs after a second round of drug price negotiations under the program, according to an announcement from President Donald Trump’s administration on Tuesday. The savings are estimated based on what Medicare spent on the drugs last year.
Medicare beneficiaries are estimated to save $685 million in out-of-pocket costs when the prices take effect in 2027.
and Wegovy, blockbuster but expensive drugs often used for weight loss and diabetes treatment, are among the drugs selected for the second round by Joe Biden’s administration just days before he leaves office. The negotiated price for 2027 ranges from US$277 for Ozempic to US$386 for Wegovy.
However, manufacturer Novo Nordisk this month announced a more comprehensive agreement to sell the drugs to Medicare for $245. That agreement includes increased coverage of obesity drugs by Medicare and Medicaid.
Overall, the 15 drugs were used by about 5.3 million Medicare beneficiaries in 2024 and treat a variety of illnesses, including asthma, cancer and diabetes. They accounted for $42.5 billion in prescription drug costs in 2024, before taking into account the rebates and reimbursements that Medicare already receives.
Joe Biden’s administration said last year that the federal government would save $6 billion on 2023 prices in the historic initial round of negotiations, which focused on the 10 most used and expensive drugs by Medicare beneficiaries.
The $6 billion in savings to Medicare represents a 22% reduction in total net drug spending, taking into account discounts and rebates, Biden administration officials said at the time. The Biden administration said it could not provide details on the net cost cuts for each drug as it is confidential information.
As in his first term, . But in his second term, he chose to reach voluntary agreements with individual manufacturers rather than issue regulations or work with Congress to enact laws. It is focused on “developed nation” pricing, in which drugmakers sell their products to American patients at the lowest price available in comparable countries.
To date, he has negotiated similar agreements with five manufacturers who have agreed to provide those prices to Medicaid and use that benchmark for new drug launches. Additionally, drugmakers will sell certain discounted medications directly to consumers through the TrumpRx online platform, scheduled to launch early next year. Furthermore, companies will invest more in national production, which will guarantee them an exemption from tariffs for three years.
