Medicare’s drug price negotiation program is entering its next phase. A second round of negotiated prices takes effect on January 1, 2027, covering 15 widely used Part D drugs — and the discounts are bigger than most people expect. Here’s what’s changing, which drugs are affected, and how much you could actually save.
What Is the Medicare Drug Price Negotiation Program?
The program was created by the Inflation Reduction Act of 2022. For the first time, the Centers for Medicare & Medicaid Services (CMS) is allowed to negotiate directly with drug manufacturers on the price Medicare pays for certain high-cost medications covered under Part D.
The first round of negotiated prices — covering 10 drugs — already took effect on January 1, 2026. The second round, covering the 15 Part D drugs in this post, takes effect January 1, 2027. CMS has also announced a third cycle: on January 27, 2026 it selected 15 more drugs (plus Tradjenta for renegotiation), including drugs covered under Medicare Part B for the first time, with those prices set to start January 1, 2028.
The 15 Drugs Getting New Negotiated Prices in 2027
The second group of negotiated drugs includes widely prescribed medications for diabetes, obesity, cancer, and asthma — including the GLP-1 drugs Ozempic and Wegovy. Based on 2024 list prices, the negotiated discounts range from 38% (Austedo/Austedo XR) up to 85% (Janumet/Janumet XR), with other drugs like Breo Ellipta (83%), Linzess (75%), and Ibrance (50%) also seeing steep cuts.
Not every dosage or formulation of a drug is automatically included, so it’s worth confirming your exact prescription is on the official negotiated list before assuming your price will drop.
How Much Could You Actually Save?
Because these prices are new, it helps to see the math in a simple example rather than just a percentage:
| Scenario | Illustrative 30-Day List Price | Illustrative Negotiated Price (the price Medicare and your plan work from) |
|---|---|---|
| Drug with an 85% negotiated discount | $500 | ~$75 |
| Drug with a 50% negotiated discount | $500 | ~$250 |
| Drug with a 38% negotiated discount | $500 | ~$310 |
The table above is only an illustration of the percentages. What you personally pay depends on your plan’s deductible and cost sharing, not on the list price minus a percentage (see the worked example below). Nationally, CMS estimates that people enrolled in Part D would save about $685 million in out-of-pocket costs once these prices take effect in 2027. CMS also estimates that, had the negotiated prices been in effect in 2024, net Medicare spending on these 15 drugs would have been about $12 billion lower (roughly 44%). That headline figure leaves out Coverage Gap Discount Program spending; counting it, CMS puts the savings at about $8.5 billion (roughly 36%).
Do You Need to Do Anything to Get the Lower Price?
No separate application is required. If you’re enrolled in a Medicare Part D plan (or a Medicare Advantage plan with drug coverage) and you’re prescribed one of the negotiated drugs, the lower price is applied automatically at the pharmacy once it takes effect on January 1, 2027.
The one thing worth doing ahead of time: check with your pharmacist or plan that your specific drug and dosage are on the finalized negotiated list, since coverage details can vary slightly by plan.
How This Fits With the Part D Out-of-Pocket Cap
These negotiated prices work alongside the Medicare Part D annual out-of-pocket cap on covered drugs. The cap is $2,100 in 2026, and according to Associated Press reporting on the 2027 plan parameters it rises to $2,400 in 2027, with the standard deductible moving from $615 to $700. Even if you hit your annual cap before a negotiated price applies, the negotiated price still lowers what your plan pays — which helps keep premiums and overall plan costs more stable for everyone in the plan.
Where to Check the Official List
Because negotiated drug lists and effective dates can be updated, the safest way to confirm your medication is included is to check CMS’s official announcements directly rather than relying on secondhand summaries — including this one. Bookmark the official source below and check back as the January 1, 2027 effective date approaches.
Frequently Asked Questions
Is this the same as a drug coupon or discount card? No. Negotiated prices are built into what Medicare Part D pays and are applied automatically at the pharmacy for eligible enrollees — you don’t need a separate card or coupon.
What if my drug isn’t on the list? Only the specific drugs selected by CMS for each negotiation cycle get a negotiated price. Other medications may still be affected indirectly as plans adjust formularies, but they won’t see this specific discount.
Will there be more rounds after 2027? Yes. The program is designed to add more negotiated drugs in future cycles, so it’s worth checking CMS’s updates each year.
The Real Prices: All 15 Drugs, Side by Side
These are the negotiated 30-day prices for 2027 compared with each drug’s 2024 list price, as reported from the CMS price announcement. Discounts are rounded.
| Drug | 2024 list price | 2027 negotiated price | Discount |
|---|---|---|---|
| Ozempic, Wegovy, Rybelsus (semaglutide) | $959 | $274 | 71% |
| Trelegy Ellipta | $654 | $175 | 73% |
| Xtandi | $13,480 | $7,004 | 48% |
| Pomalyst | $21,744 | $8,650 | 60% |
| Ofev | $12,622 | $6,350 | 50% |
| Ibrance | $15,741 | $7,871 | 50% |
| Linzess | $539 | $136 | 75% |
| Calquence | $14,228 | $8,600 | 40% |
| Austedo / Austedo XR | $6,623 | $4,093 | 38% |
| Breo Ellipta | $397 | $67 | 83% |
| Xifaxan | $2,696 | $1,000 | 63% |
| Vraylar | $1,376 | $770 | 44% |
| Tradjenta | $488 | $78 | 84% |
| Janumet / Janumet XR | $526 | $80 | 85% |
| Otezla | $4,722 | $1,650 | 65% |
Worked Example: What a Year of Ozempic Could Cost You
The negotiated price is what Medicare and your plan work from. It lowers your cost because your deductible and coinsurance are calculated on it. Here is a simplified example using the standard Part D benefit, which is not every plan’s design.
Assumptions: a $700 deductible, 25% coinsurance after it, a $2,400 annual cap, one 30-day fill per month for 12 months, and a drug that falls under the standard benefit. Your plan may charge flat copays instead, so treat this as a rough guide.
- At the $959 list price: month 1 costs about $765 (the $700 deductible plus 25% of the remaining $259), and each later month about $240. That adds up to well over $2,400, so you would hit the cap and pay $2,400 for the year.
- At the $274 negotiated price: months 1 and 2 cost $274 each, month 3 costs about $183 (the last $152 of the deductible plus 25% of the remaining $122), and months 4 through 12 cost about $68.50 each. That is roughly $1,350 for the year.
In this example the difference is roughly $1,050 a year. Remember that Part D generally does not cover drugs used only for weight loss, so confirm whether your plan covers Wegovy for your specific situation.
Timeline: What Happens and When
- November 25, 2025: CMS announced the negotiated prices for the 15 drugs in this post.
- January 1, 2026: negotiated prices begin for the first 10 drugs (Eliquis, Enbrel, Entresto, Farxiga, Imbruvica, Januvia, Jardiance, NovoLog/Fiasp, Stelara, Xarelto).
- October 15 to December 7, 2026: Medicare open enrollment, the time to check that your plan’s formulary covers your drug for 2027.
- January 1, 2027: the 15 negotiated prices take effect.
- January 1, 2028: prices for the third cycle, which for the first time includes Part B drugs, take effect.
Common Mistakes to Avoid
- Assuming a discount percentage equals the drop in your own bill. Your cost depends on your plan’s deductible, coinsurance and tier.
- Staying with your plan without checking its 2027 formulary during open enrollment.
- Expecting a lower price on a different drug in the same class. Only the 15 selected drugs get a negotiated price.