By Peter Loftus

The U.S. government negotiated lower prices in the federal Medicare program for 15 high-selling medicines including Ozempic, widening an effort to rein in drug costs.

The new prices, which will take effect in 2027, shave 38% to 85% off the list prices for drugs for diseases including asthma, cancer and diabetes. The reductions are estimated to save Medicare, the health-insurance program for the elderly, $12 billion.

For some patients, the lower prices could reduce spending on copays or other out-of-pocket charges imposed by their particular plan. Other patients taking the drugs might not see a direct savings, however, because they have fixed monthly copays.

Also, Medicare members now have a $2,000 annual cap on out-of-pocket drug costs. Yet the savings could help curb growth in plan premiums.

In addition to Ozempic, other drugs that will cost Medicare less thanks to the negotiations include GSK's Trelegy asthma treatment, Pfizer's breast-cancer therapy Ibrance and Merck diabetes pill Janumet -- all of them huge sellers.

The price cuts apply to Medicare, not to private health-insurance plans. Medicare spends more than $150 billion a year on prescription drugs, and the cuts will mean reduced revenue for drugmakers. Yet some companies say the impact will be modest.

Some of the muted effect is because drugmakers already provide rebates and discounts to Medicare drug-benefit plans on many drugs. So the negotiated prices aren't as much of a discount off net prices as they are from list prices.

The Centers for Medicare and Medicaid Services said the new negotiated prices would reduce net spending on those drugs in Medicare -- after rebates and fees -- by about 44%, compared with 2024 levels.

CMS estimates the new price cuts will save patients about $685 million in out-of-pocket costs in 2027.

The highest-profile drug subject to this year's price cuts was Novo Nordisk's semaglutide, which it sells as Ozempic and Rybelsus for Type 2 diabetes and Wegovy for weight loss.

The new Medicare price for the drugs is $274 a month. Novo Nordisk had listed the prices for Ozempic and Rybelsus at $998 a month, and $1,349 a month for Wegovy, though the company has been reducing their cost recently.

This month, Novo Nordisk lowered the cash prices of Ozempic and Wegovy for existing self-pay patients to $349 a month. It also reached a deal with the White House to sell the drugs to Medicare for $245 a month, with patients paying $50 copays.

Novo Nordisk said recently that the price cuts it negotiated for Ozempic, Rybelsus and Wegovy would have reduced the company's global sales by a low single-digit percentage if they had been in effect for full-year 2025.

The cuts followed negotiations between the Centers for Medicare & Medicaid Services and drugmakers. They mark the second round of discounts that the agency has secured, after CMS last year negotiated lower prices for 10 drugs including widely used blood thinner Eliquis.

The lower prices for those first 10 drugs go into effect next year.

CMS selected the 15 drugs for negotiation this year because they generate high costs for the program and were on the market for at least seven years at the time of selection. It gained the authority to negotiate under the Inflation Reduction Act signed by former President Joe Biden in 2022.

Drugmakers have opposed the Medicare drug-price negotiations because they say they jeopardize their ability to fund research and development of new medicines.

"We have seen that government price setting has not translated to lower out-of-pocket costs for patients and can lead to a loss of coverage for medications and higher insurance premiums," Novo Nordisk said. "We will continue to work with stakeholders and policymakers to expand affordable access to our medicines through both government and commercial insurance plans."

CMS is set to select 15 additional drugs for negotiation next year, and then up to 20 each year after that.

Write to Peter Loftus at Peter.Loftus@wsj.com

(END) Dow Jones Newswires

November 25, 2025 19:22 ET (00:22 GMT)

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