Published in Blackstone Valley Call & Times on December 2, 2025
With Medicare Open Enrollment ending next week, the Centers for Medicare & Medicaid Services (CMS) has announced that last year’s Medicare negotiations produced a net savings of 44%—about $12 billion—on 15 widely used prescription drugs that treat cancer and other serious chronic conditions.
The new Maximum Fair Prices (MFPs) for these 15 drugs will take effect on January 1, 2027. Combined with the 10 drugs already negotiated—whose MFPs take effect January 1, 2026—a total of 25 drugs will have negotiated lower prices. These medications, used to treat conditions such as cancer, diabetes, asthma, and cardiovascular and neurological disorders, represent some of the highest Medicare Part D spending.
The Beginning of Drug Price Negotiations
Three years ago, after President Biden signed the Inflation Reduction Act (IRA) in August 2022, CMS began developing the process for Medicare’s first-ever drug price negotiations. On March 15, 2023, the federal agency issued its initial program guidance and received more than 7,500 public comments from consumer groups, patient advocates, drug manufacturers, and pharmacies. Revised guidance followed on June 30, 2023.
On August 29, 2023, CMS released the first list of 10 high-cost drugs selected for negotiation—marking the first time in Medicare’s history that it could negotiate directly with pharmaceutical companies.
Pharmaceutical industry groups and several companies attempted to block the law in court. In response, 70 organizations and 150,000 petition signers urged Merck, Bristol Myers Squibb, Janssen Pharmaceuticals, Astellas Pharma US, the Pharmaceutical Research and Manufacturers of America (PhRMA), and the U.S. Chamber of Commerce to drop their lawsuits. Multiple organizations also filed amicus briefs supporting the law.
Three years in process, and with courts ultimately allowing the program to proceed, that first round of 10 drugs with negotiated prices will take effect in 2026.
CMS Drug Negotiations Added 15 Drugs
On January 17th, CMS announced it had selected 15 additional drugs for the second cycle of negotiations under Medicare Part D and on November 25th, it was announced that agreements had been reached on all of them. These medications are among the most costly and most commonly used by Medicare beneficiaries, treating conditions such as cancer, diabetes, and asthma. The new round of negotiations is expected to save Medicare billions and strengthen the program’s long-term sustainability.
“This year’s results stand in stark contrast to last year’s,” said CMS Administrator Mehmet Oz, MD, in announcing the second cycle of negotiations. “Using the same process with a bolder direction, we have achieved substantially better outcomes for taxpayers and seniors in the Medicare Part D program — not the modest or even counterproductive ‘deals’ we saw before.”
“Whether through the Inflation Reduction Act or President Trump’s Most Favored Nation policy, this is what serious, fair, and disciplined negotiation looks like,” adds CMS Deputy Administrator and Medicare Director Chris Klomp. “I’m deeply proud of our team, who execute exceptionally well to bring affordability to the country in everything we do.”
Between January 1 and December 31, 2024, approximately 5.3 million Medicare Part D enrollees used one or more of these 15 drugs. Total gross Part D spending for them was $42.5 billion, representing about 15% of all Part D drug costs.
Anthony Wright, executive director of Families USA, praised the newly released negotiated prices, stating that they show what is possible when “policymakers put patients before corporate profits.” Wright emphasized that these reductions build on the work of establishing the Drug Price Negotiation Program, which aims to provide financial relief to older adults and people with disabilities.
Wright noted that the first and second rounds of negotiated drugs together account for about one-third of Medicare Part D spending, with price reductions ranging from 38% to 85%. In 2027, beneficiaries using these drugs are projected to save $685 million in out-of-pocket costs. He added that the savings support both individual beneficiaries and the long-term sustainability of the Medicare program.
Despite pharmaceutical companies’ continued attempts to limit the program—through lawsuits and legislative provisions such as those in H.R. 1—Wright said the negotiation program remains “the most effective tool currently available to lower drug prices.”
“The Medicare Negotiation Program changed the trajectory of drug pricing in the United States, helping to reduce Big Pharma’s monopoly pricing power, which dictated prices to Americans on Medicare for two decades,” said Merith Basey, executive director of Patients for Affordable Drugs in a statement. “This second round of negotiations — now under President Trump — marks another major milestone, delivering continued savings for patients and taxpayers,” he said.
“The lower negotiated prices are more than numbers on a page. For patients who’ve been forced to work multiple jobs, cut pills in half, or choose between filling a prescription and buying groceries, these lower prices will bring long-overdue relief, flexibility, and stability,” added Basey.
“The requirement that Medicare negotiate lower prices for prescription drugs continues to pay dividends for older Americans and taxpayers,” adds Richard Fiesta, executive director of the Alliance for Retired Americans. “The announcement of lower drug prices for 15 high-priced drugs is a win for more than 5 million seniors who take these drugs to treat asthma, diabetes, lung disease and other serious conditions, and will soon pay less for their medications,” he says.
“The 4.4 million members of the Alliance are pleased that the Trump Administration has followed the law, negotiated these prices, and defended this law in court,” Fiesta says, calling on Congress to increase the number of drugs subject to price negotiations.
While the White House along with aging groups praise the impact of IRA’s Medicare drug negotiation provisions, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued a statement calling it “flawed.”
“Whether it is the IRA or MFN, government price setting for medicines is the wrong policy for America. Price setting does nothing to rein in PBMs who decide which medicines are covered and what patients pay. In fact, many patients are facing additional coverage barriers and paying more out-of-pocket for medicines because of the IRA, warns Alex Schriver, Senior Vice President of Public Affairs.
“These flawed policies also threaten future medical innovation by siphoning $300 billion from biopharmaceutical research, undermining the American economy and our ability to compete globally,” states Schriver, noting that PhRMA members are stepping up to make medicines more affordable by enabling direct purchase at lower prices and investing in U.S. manufacturing and infrastructure.
Lower Drug Cost Legislation Introduced
Congressman John B. Larson (D-CT), a senior member of the House Ways and Means Committee, praised the latest CMS announcement, estimating that both negotiation rounds will save older Americans more than $2 billion per year in out-of-pocket costs. Larson noted that families and seniors continue to struggle with rising prices, especially for prescription drugs. The lawmaker pushed to enable Medicare to negotiate drug prices to lower drug costs by the enactment of IRA.
Last week, House Democrats introduced the Lower Drug Costs for American Families Act, aimed at closing loopholes in H.R. 1 and further reducing prescription drug prices. The bill (H.R. 6166), introduced November 20 by Ranking Members Frank Pallone Jr. (Energy and Commerce), Richard Neal (Ways and Means), and Bobby Scott (Education and Workforce), has been referred to all three committees.
Key provisions of the bill would:
- Extend Medicare’s price negotiation authority to all Americans with private insurance—covering more than 164 million people with employer-sponsored plans and over 24 million enrolled in Affordable Care Act plans
- Apply inflation-based rebate protections to private insurance markets, potentially saving $40 billion over 10 years
- Increase the number of negotiated drugs from 20 to 50 per year
- Extend the $2,000 annual out-of-pocket prescription drug cap to privately insured patients
- Cap insulin costs at $35 per month for those with private insurance
- Close the orphan-drug loophole that allows companies to avoid negotiation
- Require consideration of international drug prices to ensure Americans do not pay three to five times more than patients in other countries
Continue the Momentum
According to CMS, the agency will announce the specifics on 15 drugs for the third round of Medicare price negotiations by February 1, 2026. This new round will include drugs paid under Medicare Part B for the first time and will begin with negotiated prices effective January 1, 2028. CMS has already released final guidance for the program and will also use this process to select drugs for renegotiation in previous cycles. IRA also establishes an ongoing process where more drugs will be selected for negotiation in subsequent years.
A Dec. 2024 AARP survey found that almost 3 in 5 adults age 50 and older expressed concern about their ability to afford prescriptions over the near future. Respondents included both Medicare beneficiaries and younger persons. About 96 percent of the respondents call on the government to do more to lower pharmaceutical prices.
AARP noted that this survey was taken right before a new $2,000 cap on out-of-pocket drug expenses took effect in 2025.
With the announcement of lower drug costs that result from Medicare’s round 2 drug negotiations, there is an opportunity to build on this momentum for real change. Lawmakers can legislate to put the public’s health above profit by giving consumers more power to negotiate, making competition stronger, and keeping patients from having to pay too much out of pocket.
It is now time for Congress to act.
Herb Weiss 