Pharmaceutical Companies Agree to Medicare Drug Price Cuts, Offering Relief to Seniors
New York – In a move praised by fiscal conservatives, pharmaceutical companies have agreed to lower the prices of 15 prescription drugs under Medicare. These reductions, the Trump administration says, are projected to save taxpayers and older Americans billions of dollars.
The negotiated prices are the result of ongoing efforts to address the rising cost of healthcare, a key concern for many Americans. While the final price a Medicare recipient pays at the pharmacy will vary based on their individual plan and prescription drug spending, these cuts represent a significant step towards affordability.
Health Secretary Robert F. Kennedy Jr. highlighted the deals as a victory for the Trump administration’s commitment to lowering healthcare costs. “President Trump directed us to stop at nothing to lower health care costs for the American people,” Kennedy said. “As we work to Make America Healthy Again, we will use every tool at our disposal to deliver affordable health care to seniors.”
This agreement marks the completion of a second round of negotiations, increasing the total number of drugs with negotiated prices to 25. The new prices will take effect in 2027.
The negotiated prices include popular medications like Ozempic and Wegovy, as well as drugs for asthma, arthritis, diabetes, irritable bowel syndrome, and various cancers.
Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services, stated the administration delivered “substantially better outcomes for taxpayers and seniors in the Medicare Part D program” than the previous year’s deals.
While the savings for individual Medicare beneficiaries will vary, a new rule capping out-of-pocket drug costs at $2,000 per year will provide further relief to seniors with high prescription expenses.
Spencer Perlman, director of health care research at Veda Partners, noted the improved outcomes likely reflect the specific drugs being negotiated and lessons learned from earlier negotiations. “if we take the administration at their word, I think it demonstrates that they have secured meaningful price concessions for seniors, meaning the Medicare Drug Price Negotiation Program is working as intended.”
The Trump administration has also pursued other avenues to lower drug costs for the broader population, demonstrating a commitment to responsible healthcare spending.
Pharmaceutical companies, however, remain opposed to government price negotiations, citing concerns about reduced investment in research and development.
“Whether it is the IRA or MFN, government price setting for medicines is the wrong policy for America,” said Alex Schriver, senior vice president of public affairs at the Pharmaceutical Research and Manufacturers of America, or PhRMA. “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.”
Next year, Medicare will negotiate prices for another 15 drugs, including those administered by physicians, continuing the effort to provide affordable healthcare options for seniors.
