The Trump administration announced Tuesday evening that Medicare is projected to save close to 12 billion dollars on fifteen high cost prescription medications following the latest round of federal drug price negotiations. The savings estimate is based on what Medicare spent on these treatments last year and amounts to roughly a 44 percent reduction.
Medicare beneficiaries are expected to save an additional 685 million dollars in out of pocket spending once the new prices take effect in 2027.
Among the drugs included in this round are Ozempic and Wegovy, two popular GLP 1 medications widely used for diabetes management and medical weight loss. The Biden administration initially placed them on the negotiation list just before leaving office. Under the renegotiated pricing, Medicare would pay between 277 dollars for Ozempic and 386 dollars for Wegovy in 2027.
However, Novo Nordisk recently reached a broader agreement with the Trump administration to sell both medications to Medicare for 245 dollars. This deal also expands Medicare and Medicaid access for obesity treatment.
Millions of Enrollees Stand to Benefit
Roughly 5.3 million Medicare enrollees used one or more of these fifteen medicines in 2024. The drugs treat a wide range of conditions including diabetes, cancer and asthma. Before existing rebates and discounts, they accounted for 42.5 billion dollars in spending last year.
Under the previous Medicare rules in effect before the Inflation Reduction Act redesign, the expected savings would have been significantly lower, estimated at about 8.5 billion dollars.
While the negotiation program created under the Inflation Reduction Act was a central part of former President Joe Biden’s strategy to lower drug costs, it has become less of a priority under President Trump. Instead of pushing additional regulation, Trump has focused on voluntary deals with pharmaceutical companies, which he says will bring US drug prices closer to those paid in other wealthy nations.
The Centers for Medicare and Medicaid Services negotiated price cuts ranging from 38 percent to as high as 85 percent off the list prices of the selected medicines. These figures exclude confidential Medicare rebates, which makes it difficult to calculate the exact net savings for each drug.
Administration Pushes Back on Prior Claims by Biden Officials
Before releasing the second round of pricing results, Trump administration officials minimized the savings announced during the Biden era on the first ten negotiated medications.
At a recent Cabinet meeting, Health and Human Services Secretary Robert F. Kennedy Jr. accused previous Democratic leaders of overstating their achievements, saying that only one drug saw a substantial net price reduction in round one.
The pharmaceutical industry has repeatedly challenged the negotiation program in federal courts, arguing that government intervention will limit access to medications and ultimately harm patients. Drugmakers say forced pricing does not guarantee lower costs for consumers and could raise insurance premiums.
Review of First Round Results
Biden administration officials previously claimed that Medicare would save six billion dollars on the first round of negotiated drugs. They said Medicare beneficiaries would save around 1.5 billion dollars once the prices take effect.
That six billion dollar figure represented a net spending drop of roughly 22 percent after rebates and discounts. Officials declined to share detailed pricing information for each medication, citing competitive protections.
Experts note that comparing the first and second rounds is difficult because savings depend heavily on which drugs are selected, how competitive the market is and how large existing rebates already are.
Stacie Dusetzina, a professor of health policy at Vanderbilt University, said the second round was expected to produce greater savings due to the inclusion of more cancer drugs, which typically do not receive heavy discounts.
She called the overall results “successful” even though she hoped the GLP 1 prices would more closely match the lower rate secured in Trump’s separate deal with Novo Nordisk.
How Enrollees Will See the Savings
Most Medicare beneficiaries will benefit from reduced pharmacy counter costs starting in 2027. Those who pay co insurance will see charges based on the new negotiated prices. The lower rates are also expected to slow the rise of Medicare drug plan premiums.
Trump Prioritizes Voluntary Drug Pricing Deals
Lowering drug prices has been one of Trump’s main domestic goals. Similar to his first term, his administration is pursuing voluntary price agreements with drugmakers rather than new Congressional action. Trump has focused on “most favored nation” pricing, a model requiring companies to sell to US patients at the lowest price offered in comparable developed countries.
So far, five drugmakers have signed agreements to use most favored nation pricing for Medicaid and for the launch of new medicines. Some drugs will also be sold at discounted rates directly to consumers through the TrumpRx online platform, expected to launch next year. Participating companies will also expand domestic manufacturing in exchange for a temporary break from tariffs.
Only two deals, both with Eli Lilly and Novo Nordisk, include benefits specifically for Medicare enrollees. Some Medicare beneficiaries will pay a 50 dollar copay for certain GLP 1 drugs approved for both diabetes and obesity, while Medicare itself will pay 245 dollars per dose starting in mid 2026.
Experts Say Impact of Trump’s Deals Remains Unclear
Specialists caution that it is too early to determine whether Trump’s voluntary model will significantly reduce drug costs. Few details of the agreements have been made public.
Medicaid already receives steep discounts, and many drugs launch first in the United States, making it difficult to determine which countries will serve as pricing benchmarks.
Benjamin Rome, a health policy expert at Brigham and Women’s Hospital and Harvard Medical School, said the current deals are unlikely to become an effective long term model for controlling drug costs.