Medicare Negotiated Drug Prices: 15 More Cuts Arrive January 2027

What happened

On January 1, 2027, Medicare's drug price negotiation program adds a second group of medicines. Negotiated prices for 15 more Part D drugs take effect that day, including the semaglutide drugs Ozempic, Wegovy and Rybelsus. The cuts run from 38% to 85% below 2024 list prices.11 Counting the 10 drugs whose negotiated prices started January 1, 2026, Medicare will have set prices for 25 drugs.2 CMS announced the second-round prices on November 25, 2025, so the numbers have been public for nearly a year.12 What makes them matter now is the calendar. Open enrollment for 2027 coverage runs from October 15 through December 7, 2026, and beneficiaries are picking plans while the prices take effect.13

Semaglutide gets the most attention. Medicare's price for a 30-day supply is $274, compared with a 2024 list price of $959, a 71% cut.12 The steepest cuts went to older, high-volume pills and inhalers:

• Janumet and Janumet XR fall 85%, to $80 a month.11
• Tradjenta falls 84%, to $78.12
• Breo Ellipta falls 83%, to $67.11

Cancer drugs got smaller cuts in percentage terms, but they carry the largest dollar amounts:

• Pomalyst, which had the highest list price in the round, drops from $21,744 to $8,650 a month.11
• Ibrance drops by half, to $7,871.11
• Xtandi falls 48%, to $7,004.11

Austedo, used for movement disorders, got the smallest cut at 38%.11

The first-round prices are already in effect. They include $231 for Eliquis, $197 for Jardiance and Xarelto, $113 for Januvia and $4,695 for Stelara.12 CMS estimated those 10 prices would have saved Medicare about $6 billion, roughly 22%, if they had applied in 2023. It also projected $1.5 billion in out-of-pocket savings for enrollees in 2026.1 For the second round, CMS estimates enrollees will save about $685 million out of pocket in 2027.16 It also estimates the program would have cut net covered drug costs by $12 billion in 2024, or about $8.5 billion once coverage-gap discount spending is counted.55

Where the coverage agrees, and where it doesn't

The reporting agrees on the headline numbers. Consumer guides, broker sites and business outlets list the same 15 drugs, the same 30-day prices and the same discount percentages.11121316 That reflects how open the process has been. CMS has published each round's selected drugs and final prices on a fixed statutory schedule.6

The coverage splits on the details, and some of those details matter to readers. One consumer site lists Eliquis's pre-negotiation price at $592 with a 61% discount.4 Other guides use the $521 list price CMS used in its 2023 baseline.12 One analytics site's international comparison lists Eliquis's negotiated price at about $323, well above the $231 that CMS published.212 Some outlets also mix up the out-of-pocket cap. One describes the $2,000 Part D cap as starting in 2026.4 In fact the cap began in January 2025 and rose to $2,100 for 2026.2 It rises again to $2,400 in 2027.23 These look like small slips, but they distort the household budgeting these guides are meant to help with.

The more important split is over what a negotiated price actually means for a patient. Broker and agent coverage stresses that the price, which CMS calls the Maximum Fair Price, sets what the drug costs inside Medicare's payment system. A patient's bill still depends on the plan's tier placement, deductible and coinsurance.133 Agents report that more plans are swapping flat copays for percentage-based coinsurance on brand-name drugs. Some are openly unsure whether negotiation lowers costs or mostly shifts them around.13 Advocacy research is more upbeat. AARP's analysis of first-round drugs found enrollee cost-sharing fell by about half on average in stand-alone plans it studied in five high-enrollment states.5 My reading is that both are true. The price cuts are real and large, but how much of each cut reaches a patient depends heavily on how the plan is designed.

Medicare Advantage and Part D: cheaper premiums, higher deductibles

The 2027 plan market shows that tension clearly. CMS projects the average Medicare Advantage premium will fall 16.5%, from $14.37 to $12.00 a month.26 For Advantage plans that include drug coverage, the average Part D premium after rebates is projected to fall 38%, to $7.26 Stand-alone Part D plans look different. Their average premium rises only slightly, from $35.09 to $36, but the Part D Premium Stabilization Demonstration ends after 2026. That federal subsidy cost $9.8 billion over two years.26

KFF's analysis shows why the averages are misleading. No $0-premium stand-alone plans will be offered in 2027 to enrollees who don't get low-income subsidies. About 4 million people who paid no premium in 2026 will face one.24 Some enrollees who stay in their current plans could see increases of $50 a month or more.24

Other costs are rising for everyone. The standard Part D deductible goes from $615 to $700, the out-of-pocket cap from $2,100 to $2,400, and the base beneficiary premium from $38.99 to $41.33.23 The maximum in-network out-of-pocket limit for Medicare Advantage rises to $9,850.28 The median limit in CMS's plan data rose from $6,500 to $7,100.21 Industry reporting also describes carriers trimming supplemental benefits, and roughly one in ten current Advantage members expected to lose their plan.27

In short, premiums are flat or falling, while deductibles, caps and coinsurance are moving the other way. Lower drug prices make it easier for plans to hold premiums down. They don't stop plans from passing costs to patients when they fill a prescription.

Employers: no relief from Medicare's discounts

Workers with employer coverage don't get Medicare's prices. Their 2027 outlook is the worst in two decades. Marsh's survey of more than 1,800 employers projects health benefit costs per employee will rise 8.2% in 2027, the largest increase since 2003. Without cost-cutting measures, the projected increase would be 11%.34 Aon puts the rise at 9.5%, pushing average per-employee costs above $19,000.36 Marsh's actuaries attribute a full percentage point of the increase to growing use of GLP-1 drugs.33 Hospital and provider consolidation, expensive new treatments and AI-assisted billing also contribute.38

Employers are responding by cutting coverage. Among Business Group on Health members, the share covering GLP-1s for weight loss fell from 72% to 60% in a year, and about 14% have dropped or plan to drop it for 2027.39 WTW found coverage among employers with more than 100 workers fell to 53%, its first decline in three years.33 Fifty-nine percent of employers in Marsh's survey plan cost-cutting changes such as higher deductibles.37

The gap is stark. A Medicare beneficiary will get semaglutide at a $274 negotiated price.12 Employers typically pay in the mid-$500s to mid-$600s per user each month for weight-loss coverage.33 Separately, Novo Nordisk has said it will cut the U.S. list price of its semaglutide drugs to $675 a month starting in 2027.12 Health Affairs reports a $245 price tied to a White House "most favored nation" deal and a related CMS model for semaglutide and tirzepatide.51 So semaglutide now has a Medicare price, a list price and a deal price, all set by different processes. That suggests the commercial market is drifting toward prices set by government, in effect if not by law.

Medicaid and hospitals: a parallel squeeze

The drug price cuts arrive on the same date as a coverage shock. Starting January 1, 2027, adults covered through Medicaid expansion must document 80 hours a month of work, schooling, training or volunteering to keep their coverage.46 Estimates of how many people lose coverage vary widely:

• CMS's interim final rule projects 2.3 million fewer enrollees in 2027, rising to as many as 3.3 million in later years.46
• The CBO estimates more than 5 million people will become uninsured.46
• The Center on Budget and Policy Priorities counts at least 9.9 million people at risk.50

In Arkansas's earlier experiment with work requirements, more than 95% of people who lost coverage were already compliant or should have been exempt.48

Hospitals absorb the costs. A Commonwealth Fund model projects hospitals in expansion states would lose $10.9 billion to $12.4 billion in revenue, with uncompensated care up about 30%. Safety-net hospitals could see operating margins fall by 26% to 30%.41 The same analysis warns hospitals may raise rates for privately insured patients to make up the difference.41 Those increases would feed into the employer cost trend described above.

The negotiation program is also moving into hospitals and clinics directly. Its 2028 round includes Part B drugs given in medical settings for the first time, among them Botox, Entyvio, Orencia and Cimzia.51 Avalere notes that CMS hasn't yet explained how providers will be paid under those negotiated prices, which creates reimbursement risk for them.57

The bottom line

The negotiated prices are the most concrete cost relief anywhere in the U.S. health system right now. They also show the program's limits. They help Medicare's spending and patients on the listed drugs. They don't cover workers facing 8%-plus premium increases, and they don't offset Medicaid enrollees losing coverage or hospitals taking on more uncompensated care. In 2027, the government sharply lowers what Medicare pays for certain drugs while other costs are pushed onto patients, employers and hospitals. For people enrolling in Medicare this fall, a lower premium is not enough reason to pick a plan. The deductible, how the plan tiers their drugs, and whether their doctors are in network will matter more.