By Alex Moore
In January, the Centers for Medicare and Medicaid Services (CMS) announced the next 15 drugs whose prices it will negotiate directly with pharmaceutical companies, a power it gained from the 2022 Inflation Reduction Act. This is the third round of the annual price negotiations (you can find links to our articles on the first and second rounds here and here). Previous agreements between CMS and pharmaceutical companies have resulted in Medicare (and its beneficiaries) paying less for 25 different medicines, including popular weight-loss drugs like Ozempic. Other drugs that have completed the negotiation process include medicines for diabetes, heart disease, arthritis, and cancer.
What drugs are on the table for this year’s negotiations?
Medicare selects drugs for price negotiation based on price and popularity. The more a drug costs the program, the higher priority it has for getting a deal done. This year’s list includes high-impact medicines that treat Type 2 Diabetes, HIV, several kinds of cancer, plaque psoriasis, and more. You can see the full list in the table below.
| Drug Name | Treats |
| Trulicity | Type 2 diabetes, Type 2 diabetes and cardiovascular disease or multiple cardiovascular risk factors. |
| Biktarvy | Human immunodeficiency virus (HIV) type 1 infection |
| Orencia | Psoriatic arthritis and rheumatoid arthritis |
| Cosentyx | Plaque psoriasis and psoriatic arthritis |
| Erleada | Prostate cancer |
| Kisqali | Breast cancer |
| Entyvio | Crohn’s disease and ulcerative colitis |
| Verzenio | Breast cancer |
| Botox and Botox Cosmetic | Chronic migraines, overactive bladders, spasticity, and other movement disorders |
| Lenvima | Thyroid cancer, endometrial cancer, liver cancer, and kidney cancer |
| Xolair | Asthma and chronic spontaneous urticaria |
| Rexulti | Major depressive disorder, schizophrenia, agitation associated with dementia due to Alzheimer’s disease |
| Xeljanz and Xeljanz XR | Psoriatic arthritis, rheumatoid arthritis, and ulcerative colitis |
| Anoro Ellipta | Chronic obstructive pulmonary disease |
| Cimzia | Chron’s disease, plaque psoriasis, psoriatic arthritis, and rheumatoid arthritis |
When will the new prices take effect?
When CMS negotiates new prices for a drug, they take effect on January 1st in two calendar years. So, the drug prices CMS negotiated in 2024 just took effect in January 2026, while the prices it negotiated in 2025 will take effect in January 2027. The prices from this round of negotiations will become official in January 2028.
How Much Do Seniors Save From CMS Price Negotiations?
In 2024, CMS expected seniors to save about $1.5 billion in out-of-pocket costs for the 10 drugs whose price it negotiated. In 2025, it expected seniors to save $685 million in out-of-pocket costs. The agency has yet to publish seniors’ expected out-of-pocket savings for this third round, but we should expect hundreds of millions of dollars in impact from the current round of negotiations based on past results.
How Will CMS Maintain the New Prices Over Time?
Any drug whose price is set via CMS negotiating with pharmaceutical companies has its price tied to inflation. More specifically, CMS increases the prices each year based on the Consumer Price Index for All Urban Consumers (CPI-U), an index similar to the one used to calculate the Social Security Cost-of-Living Adjustment (COLA), called the CPI-W. The CPI-U tends to come in slightly above the CPI-W, but not by much, meaning the new prices will stay at least relatively in line with Social Security Benefits.