Reduction of drug prices for Medicare will save $12 billion

• Medicare will save nearly $12 billion on drugs.
• Price reductions on 15 drugs, including Ozempic, will take effect in 2027.
• Trump continues to support the "largest nation’s favorite" model for price reductions.

On November 25, 2025, the Centers for Medicare and Medicaid Services announced a reduction in price for 15 high-cost drugs, including Ozempic and Wegovy. The price reduction will occur due to negotiations on drug prices established in accordance with the Inflation Reduction Act, signed by President Joe Biden in 2022.

These changes are part of the second round of negotiations that began last year. The first round of negotiations, conducted by the Biden administration, covered 10 drugs and is expected to see price reductions for them in 2026. The new reductions, announced on November 25, will see price reductions in 2027.

According to estimates, the price reductions will allow Medicare to save nearly $12 billion, and also reduce spending by $685 million per person for those using Medicare, as lower prices begin to take effect.

Reduced prices on drugs used for the treatment of various diseases include: Ozempic for $274 (down from $959), Trelegy Ellipta for $175 (down from $654), and Xtandi for $7,004 (down from $13,480). All 15 drugs accounted for $42.5 billion in spending, or 15% of total Medicare Part D spending in 2024.

Despite the price reductions, some experts, such as Stacie Dusetzina from Vanderbilt University, believe that prices for Ozempic and Wegovy have turned out to be higher than those that the Trump administration had set at $250. Trump continues to support the "largest nation’s favorite" model, under which manufacturers of drugs are encouraged to sell their products at the lowest prices available in other countries.

The drug price negotiation program has faced opposition from drug manufacturers, but so far they have not been able to challenge it in court.

Tags: USA/Politics/Economy