Beginning in 2027, Medicare will slash what it pays for 15 of its costliest prescription drugs, bringing an average price reduction of 36 per cent to older adults who are citizens or legal residents of the United States. The decision is part of a broader push to use the competitive market power of federal drug price negotiations, under which “maximum fair prices” are established for high-spending drugs, to control Medicare’s budget and patients’ out-of-pocket costs, Nov. 26, 2025.
Glucagon-like peptide-1s and other big-ticket drugs face sharp reductions.
The new price list centres on blockbuster GLP-1 medicines, including semaglutide, sold as Ozempic for diabetes and Wegovy for weight loss, as well as the pill Rybelsus. Medicare’s negotiated monthly price for these drugs — which treat about a third of Medicare patients with cancer — will be $274 in 2027, compared with the list price of $959 in 2024, a 71 per cent reduction that could significantly lower what many patients pay at the pharmacy counter.
Other drugs on the 15-drug price list include Xtandi, a prostate cancer pill from Astellas and Pfizer; Pomalyst for multiple myeloma from Bristol Myers Squibb; Imento, a breast cancer drug from Pfizer; asthma/COPD inhalers Trelegy Ellipta and Breo Ellipta; irritable bowel disorder drug Linzess; schizophrenia/bipolar medication Vraylar and Austedo for movement disorders. Discounts off prevailing list prices range from 38 per cent to 85 per cent, depending on the product.
How they negotiated the 2027 Medicare drug prices
The cuts come after a second round of negotiations under the Inflation Reduction Act, which, for the first time, empowered Medicare to negotiate directly with drugmakers for some high-spending, single-source drugs. CMS identified 15 commonly prescribed Part D drugs based on how much Medicare was spending on them, then spent most of 2025 trading offers and counteroffers with manufacturers before setting “maximum fair prices” that take effect Jan. 1, 2027.
In 2024, for example, nearly 5.3 million Medicare Part D enrollees used these 15 drugs, accounting for $42.5 billion ( about 15 per cent) of total Part D gross covered prescription costs that year. CMS estimates that if 2027 negotiated prices had been in place in 2024, Medicare’s net spending on the drugs would have been approximately $8.5 billion lower — a reduction of about 36 per cent after accounting for coverage-gap discounts.
What would cheaper Medicare drugs mean for patients and the program?
For beneficiaries, CMS expects the new 2027 Medicare drug prices to reduce out-of-pocket spending by an estimated $685 million in one year under the standard Part D benefit design, with the largest relief flowing to those for whom GLP-1s, cancer drugs, and high-cost respiratory treatments are among their most expensive coverage. “There will be some real savings,” Sean Sullivan, a pharmacy professor who sat on the Medicare Payment Advisory Commission, told Reuters, saying that other insurers are expected to seek the same deals from manufacturers once Medicare publishes these smaller prices.
The 2027 cuts would also extend an earlier round of negotiated Medicare drug prices. In 2024, CMS announced the first batch of 10 negotiated Part D drugs — offering discounts of between 38 per cent and 79 per cent off list prices — that it estimates will save the Medicare program about $6 billion and beneficiaries $1.5 billion when those negotiated prices take effect next year. Those 2026 prices apply to commonly used drugs such as Eliquis, Xarelto, Jardiance and Stelara — creating a model that KFF analysts said could broadly increase access if every Part D plan had to offer all selected drugs and their formulations.
A lengthier fight to reshape Medicare drug prices
Policy analysts have emphasised that the 15-drug list is only the second step in a longer campaign to lower Medicare drug prices. Congress has mandated that Medicare negotiate 10 drugs in 2026, another 15 each in 2027 and 2028, and then add another every year thereafter until the negotiated-out model is gradually applied to both Part D and physician-administered Part B medications.
Meanwhile, drug companies are still lobbying against the program in court and on Capitol Hill amid concerns that steeper discounts could curtail future research and development. Supporters argue that data so far — and this is before reductions in a new class of cancer drugs, GLP-1s — indicate that Medicare can secure lower prices while maintaining cutting-edge therapies on the market, and that seniors who face high bills cannot afford to wait for relief. With another 15 drugs scheduled to begin negotiations in 2026, pressure over how far and how fast to lower Medicare drug prices is expected to grow.
Per a new CMS fact sheet on the 2027 negotiated prices, the agency will update these maximum fair prices annually once they go into effect, adjusting for inflation but retaining most of the initial discount. A separate analysis by Reuters suggests that a projected 36 per cent average savings in 2027 narrowly exceeds the approximately 22 per cent estimated from the first round of negotiations. And reporting by Axios underscores how the biggest individual cuts landed on GLP-1s and several cancer drugs — foreshadowing how Medicaid’s cutting knife could take aim at other pricey therapies in coming rounds.
Previous coverage, which included the 2024 CMS fact sheet on the first 10 negotiated drugs and a 2023 KFF analysis of that negotiation program’s access impact, helps put this year’s announcement in perspective as part of a multi-year effort to bring down the cost of high-cost medicines while standardising coverage across Part D plans.
