Newly disclosed drug prices negotiated under the IRA for the second round

The Centers for Medicare and Medicaid Services (CMS) under the Trump administration have released the finalized prices for the second set of 15 drugs negotiated through the US Inflation Reduction Act (IRA). This round of Medicare Part D negotiations was disclosed at the start of 2025, highlighting popular weight loss medications from Novo Nordisk, including Wegovy, Ozempic, and Rybelsus (semaglutide).

CMS reported that these drugs represented $42.5 billion in total Medicare spending, roughly 15% of total Part D prescription drug costs in 2024. During the same period, out-of-pocket expenses for these medications reached $1.7 billion.

The administration hailed the second negotiation round as a success. CMS Administrator Mehmet Oz stated that the outcome produced significant improvements in the Medicare Part D program. Deputy Administrator Chris Klomp attributed this success to the administrations firm stance, noting that pharmaceutical companies faced either steep financial penalties or withdrawal of their drugs from Medicare and Medicaid if agreements were not reached.

Negotiated Price Reductions

The discounts for the 15 drugs ranged from 38% to 85% off list prices, varying by dosage and formulation. The largest reduction was for Merck & Cos Janumet/Janumet XR (metformin + sitagliptin) at 85%. Boehringer Ingelheim's Tradjenta (linagliptin) and GSK's Breo Ellipta (fluticasone + vilanterol) followed with cuts of 84% and 83%, respectively. The smallest reduction was for Teva's Austedo/Austedo XR (deutetrabenazine) at 38%.

These new prices are set to take effect on January 1, 2027. CMS estimates that if these prices had been in place in 2024, Medicare would have saved $12 billion, representing a 44% decrease in net spending. Once implemented, beneficiaries are expected to save $685 million in out-of-pocket costs.

Industry Response and Legal Challenges

While the administration celebrated the results, the pharmaceutical industry has criticized the IRA, labeling it a form of price setting. Industry representatives argue that the negotiations have not significantly lowered out-of-pocket costs for patients and could negatively affect future research and development. Multiple lawsuits aiming to overturn the IRA are still ongoing, though with limited success.

Comparison With International Prices

Using GlobalDatas Price Intelligence (POLI) database, Novos Ozempic prices in the US were compared with prices in France, Germany, Italy, Spain, and the UK. The comparison highlights differences in global drug pricing and the potential effects of the IRA negotiations on international benchmarks.

Interaction With Most Favored Nation Program

Similar to the first IRA round, questions remain about the impact of negotiated prices on Medicare, given existing confidential rebates and discounts. Additionally, the Trump administrations Most Favored Nation (MFN) program could override IRA pricing. In November 2025, Novo entered an MFN deal for Wegovy, offering it at $245 per month to Medicare starting in 2026, lower than the $274 negotiated under the IRA. CMS confirmed that MFN prices will take precedence over IRA-negotiated prices, indicating that future MFN agreements could supersede subsequent IRA negotiations.

By February 1, 2026, CMS is expected to announce the next 15 drugs for IRA Medicare price negotiations.

Author: Ethan Caldwell