Takeaways
- The Inflation Reduction Act (IRA) allows Medicare to negotiate lower prices for certain high-cost prescription drugs.
- The first 10 drugs negotiated under the IRA resulted in price reductions of 38 percent to 79 percent.
- The Centers for Medicare & Medicaid Services recently announced 15 more prescription medications that will be part of the next round of pricing negotiations.
- The Trump administration has indicated its intention to proceed with the current Medicare drug price negotiations outlined in the IRA.
If you are enrolled in Medicare Part D prescription drug coverage, rising drug prices are probably on your mind. The high cost of prescription drugs is one of the reasons the Inflation Reduction Act (IRA) was passed into law in 2022. The law gives Medicare the ability to negotiate directly with pharmaceutical manufacturers to lower the prices of certain high-cost, single-source drugs. This initiative aims to reduce prescription drug costs for beneficiaries and alleviate financial pressure on the Medicare program.
In August 2023, the Centers for Medicare & Medicaid Services (CMS) announced the first 10 drugs that it would negotiate new prices for, affecting about 9 million Medicare enrollees. These negotiations succeeded in lowering prices for all 10 drugs by between 38 percent and 79 percent.
The new prices for each of these widely used prescription medications are set to take effect in January 2026. According to the CMS, Medicare Part D enrollees will enjoy an estimated total of $1.5 billion in savings in their out-of-pocket costs in 2026 as a result. Meanwhile, drugmakers have lobbied against the pricing negotiations, including filing several lawsuits that are still pending.
Second Round of Drug Prices to Be Negotiated
In January 2025, the CMS announced the next 15 drugs for which it will be negotiating new prices. These negotiations are scheduled to take place throughout 2025, with the newly negotiated prices set to become effective in 2027. Notably, however, sources have stated that federal employees who were to carry out the negotiations have been fired as part of the Department of Government Efficiency (DOGE)’s efforts to streamline government operations.
More than 5 million Medicare Part D enrollees were taking one or more of these medications between November 2023 and October 2024. These 15 drugs will be covered under Medicare Part D and include:
- Ozempic, Rybelsus, Wegovy: Type 2 diabetes, Type 2 diabetes and cardiovascular disease, obesity/overweight and cardiovascular disease
- Trelegy Ellipta: Asthma, chronic obstructive pulmonary disease
- Xtandi: Prostate cancer
- Pomalyst: Kaposi sarcoma, multiple myeloma
- Ibrance: Breast cancer
- Ofev: Idiopathic pulmonary fibrosis
- Linzess: Chronic idiopathic constipation, irritable bowel syndrome with constipation
- Calquence: Chronic lymphocytic leukemia/small lymphocytic lymphoma, mantle cell lymphoma
- Austedo, Austedo XR: Chorea in Huntington’s disease, tardive dyskinesia
- Breo Ellipta: Asthma, chronic obstructive pulmonary disease
- Tradjenta: Type 2 diabetes
- Xifaxan: Hepatic encephalopathy, irritable bowel syndrome with diarrhea
- Vraylar: Bipolar I disorder, major depressive disorder, schizophrenia
- Janumet, Janumet XR: Type 2 diabetes
- Otezla: Oral ulcers in Behçet’s disease, plaque psoriasis, psoriatic arthritis
Note that although this list includes weight loss drugs such as Ozempic and Wegovy, Medicare Part D does not currently cover these medications specifically for weight loss. While the Biden administration issued a proposal to change this, it may not be clear until later this year whether the Trump administration will push back.
New Changes With the Trump Administration
Upon assuming office in January 2025, President Donald Trump signed an executive order rescinding several drug pricing initiatives from the previous administration. Notably, this action reversed efforts aimed at reducing prescription drug costs for Medicare and Medicaid recipients.
Despite these reversals, the Trump administration has indicated its intention to proceed with the current Medicare drug price negotiations as outlined in the IRA. The administration has expressed a commitment to enhancing transparency within the negotiation process and has signaled potential flexibility in its approach.
Learn More About Medicare
An elder law attorney can be an invaluable resource and knowledgeable ally for older adults navigating the complexities of Medicare. These legal professionals can help individuals understand the various parts of Medicare and how each one works. With information regarding your specific health care needs and financial situation, they can provide guidance on which Medicare plans might offer the best coverage and cost savings. This personalized approach can help ensure that seniors are not only enrolled in the right plan but also maximizing their benefits.
In addition, attorneys in this area of law can help older adults understand their rights under Medicare and advocate for them if issues arise. For instance, if a claim is denied or there are disputes regarding coverage, an attorney can represent the individual and work to resolve these issues effectively. They can also assist with the appeals process, ensuring that seniors receive the care and services to which they are entitled.
Contact an experienced elder law attorney near you to get help seeking out the Medicare benefits you’re entitled to.
Learning about the Medicare benefits that may be available to you could help you save money. For additional reading about some of the basics of Medicare, check out the following articles:
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