The U.S. government is set to unveil negotiated Medicare prices this week for 15 of the most expensive prescription drugs, continuing its effort to lower healthcare costs starting in 2027. This move builds on the Inflation Reduction Act (IRA) under the Biden administration, which authorized Medicare to negotiate drug prices for the first time. The upcoming list includes well-known medicines such as Novo Nordisk’s Wegovy and Ozempic, GlaxoSmithKline’s Trelegy Ellipta, and AbbVie’s Linzess.

Medicare Drug Price Negotiations Gain Momentum

Earlier this November, officials announced a deal to cut Medicare and Medicaid prices for Novo Nordisk’s GLP-1 drugs to $245 per month. This figure sharply contrasts with the previous Medicare net price of $428 per month for Ozempic. The forthcoming price negotiations will become effective in 2027, targeting savings well below current net prices after confidential rebates and discounts. Analysts will also compare these prices to those negotiated in other wealthy nations as part of ongoing efforts to benchmark U.S. drug costs against international standards.

Sean Sullivan, a pharmacy professor at the University of Washington, emphasized the significance of releasing negotiated prices publicly. He explained that transparency enables other healthcare payers to push for comparable discounts, thereby potentially broadening cost reductions across the drug market.

Policy Origins and Industry Reaction

The IRA, enacted in 2022, empowered Medicare to negotiate prices on 10 select high-cost medicines initially, with those new prices taking effect in 2026. Notable examples included Pfizer and Bristol-Myers Squibb’s blood thinner Eliquis and Amgen’s arthritis treatment Enbrel. Goldman Sachs analysis suggests these initial negotiations produced average discounts of roughly 22% relative to Medicare’s previous net prices, though prices remain markedly higher than in four other high-income countries.

While the IRA requires consideration of manufacturer data and alternative therapies in price setting, it excludes international prices from mandatory review. Still, previous efforts by the Trump administration championed a “most-favored-nation” (MFN) pricing approach, seeking to align U.S. drug prices with the lowest prices in OECD countries with GDP per capita above 60% of the U.S. The current Medicare pilot uses a “country basket” consisting of six G-7 nations—UK, France, Germany, Italy, Canada, and Japan—plus Denmark and Switzerland. The benchmark price is calculated as the second-lowest price within this group, adjusted for GDP per capita.

The pharmaceutical sector has vigorously opposed these negotiations, filing lawsuits and warning about the potential curtailment of drug development programs. Despite resistance, the government plans to start negotiations on this next batch of 15 drugs, including prescription and hospital-administered therapies, beginning in February 2026.

Medicare: Market Outlook

Releasing Medicare’s negotiated prices for the additional 15 high-cost drugs represents a pivotal effort to reduce healthcare spending. Particularly, the substantial price cut for Novo Nordisk’s GLP-1 medications could relieve financial pressure on Medicare’s 67 million beneficiaries. This price transparency is expected to encourage insurers and other payers to negotiate similarly favorable terms, which might prompt widespread pricing adjustments across the U.S. drug market.

These negotiations build on the IRA’s framework started last year, which achieved an average 22% price reduction compared to existing Medicare net prices, although U.S. prices still significantly exceed those in some other wealthy countries. With these new prices taking effect in 2027, stakeholders will watch closely how the expanded negotiations influence costs, industry dynamics, and Medicare’s long-term sustainability.