President Donald Trump’s administration announced that Medicare will pay reduced prices for 15 prescription drugs, including commonly used weight-loss and cancer medications.
On Tuesday, the Centers for Medicare & Medicaid Services revealed that the reduced drug prices are expected to save the government about $12 billion on Medicare spending compared with last year.
“President Trump directed us to stop at nothing to lower health care costs for the American people,” Health and Human Services Secretary Robert F. Kennedy, Jr. said in a news release. “As we work to Make America Healthy Again, we will use every tool at our disposal to deliver affordable health care to seniors.”
The new “maximum fair prices” for the drugs will take effect on January 1, 2027, raising the total number of medications with negotiated prices to 25 when added to the 10 announced by former President Joe Biden’s administration last year.
.jpeg)
Included in the program are weight-loss drugs Ozempic and Wegovy and cancer drugs Xtandi, Pomalyst and Ibrance.
The others are: Trelegy Ellipta, an inhaler; Ofev, used to treat idiopathic pulmonary fibrosis; Linzess, which treats chronic constipation; Calquence, used for chronic lymphocytic leukemia; Austedo and Austedo XR, which treat movement disorders; Breo Ellipta, used for asthma; Tradjenta, a diabetes medication; Xifaxan, used for hepatic encephalopathy; Vraylar, which treats bipolar disorder and schizophrenia; Janumet and Janumet XR, which treat diabetes; and Otezla, a medication for psoriatic arthritis.
The Inflation Reduction Act, signed into law by Biden in 2022, made the negotiated prices possible. The legislation granted the health secretary the authority to bargain directly on behalf of Medicaid.
But, Trump administration officials framed their negotiation efforts as more aggressive than those carried out under Biden.
“This year’s results stand in stark contrast to last year’s,” CMS Administrator Mehmet Oz said. “Using the same process with a bolder direction, we have achieved substantially better outcomes for taxpayers.”
CMS said that the new prices will save people enrolled in Medicare prescription drug coverage about $685 million in out-of-pocket costs. About 66 million Americans get their health coverage from Medicare.
That said, most people covered by Medicare probably won’t see immediate savings from the new pricing because their out-of-pocket drug costs are already capped, according to The New York Times. Starting in 2027, the maximum they’ll pay for medications taken at home will be about $2,200.
Recent polls show that the vast majority of Americans support enabling the government to negotiate lower drug prices.
The announcement comes as the roughly 24 million people who buy insurance through Affordable Care Act marketplaces are set to see their premiums increase when ACA subsidies expire at the end of December.
This week, Trump suggested he may be open to extending the Obamacare subsidies, telling reporters “Some kind of an extension may be necessary to get something else done.” However, he also labeled Obamacare as disastrous and said, “I’d rather not extend them at all.”
And, it’s not just those enrolled with Obamacare who are set to see higher costs. About 165 million Americans with employer-backed health insurance could see prices surge due to myriad factors like inflation and health care company consolidation.
