Will Ozempic and cancer drugs be available at half price in the US by 2027? How did Medicare take the big decision of reducing the prices of 15 expensive drugs, what were the pressures behind it, and what mysterious relief will it bring to millions of elderly people?
US Medicare Price Cuts: Taking a historic step, US Medicare has announced major cuts in the prices of 15 very expensive and popular prescription drugs. This includes GLP-1 weight-loss drugs like Ozempic and Wegovy, cancer drugs like ExXtandi and Pomalyst, respiratory drugs like Trelegy Ellipta, and diabetes, neurology and gastro drugs. These prices, which will go into effect in January 2027, will provide direct relief from drug costs to millions of older Americans and save billions of dollars for US taxpayers.
How was the price cut decided?
The new rates are the result of negotiation powers given to Medicare under the Inflation Reduction Act. This is the second phase, in which the government talked directly to Big Pharma companies and got the prices reduced drastically. According to CMS, more than 5 million patients were dependent on these 15 medicines in 2024, the cost of which was continuously increasing.
Who will benefit most?
Healthcare expenses in America had been continuously increasing for many years. Especially some medicines, without which the treatment of the patient becomes difficult. Now for the first time the US government has taken such a big decision, which is going to provide great relief to millions of elderly people. The government says that millions of elderly patients will have to spend less on medicines and taxpayers will save billions of dollars. Actually, these prices have been decided after negotiations under the Inflation Reduction Act. This law, for the first time, has given Medicare the right to negotiate directly with pharmaceutical companies.
Which medicines will be cheaper? Is your medicine also in this list?
The new price list includes America’s 15 most expensive and best-selling medicines:
- Ozempic, Wegovy (GLP-1 drugs, used in diabetes and weight loss)
- Xtandi, Pomalyst, Ibrance (cancer treatment)
- Trelegy Ellipta, Breo Ellipta (respiratory and lung medications)
- Tradjenta, Janumet, Janumet XR (diabetes medications)
- Austedo, Austedo XR (Neurological Disorders)
- Linzess, Xifaxan (gastrointestinal medications)
- Otezla, Calquence (special treatment drugs)
Nearly 5 million Medicare patients used these drugs in 2024 alone. Therefore, the impact of this change is going to be very big.
Why are the prices of medicines being reduced suddenly? What is the real reason?
Weight loss drugs like Ozempic and Wegovy have become very popular in America. More than 16 million Americans take them today. High demand, high prices and high profits – these three things increased the drug expenditure to thousands of dollars. There was constant pressure on the government that the elderly and the middle class were troubled by the high prices of medicines. For this reason, Medicare for the first time directly negotiated with Big Pharma companies and forced them to reduce prices.
How did these prices come down? Will Big Pharma suffer losses?
Medicare has now got full authority to set the price. This never used to happen earlier – the drug companies used to decide the prices. Now under the Inflation Reduction Act, the government can negotiate directly with the pharma companies. If necessary, pressure can be created to reduce prices and heavy taxes can be imposed on companies on overpricing. CMS (Centers for Medicare and Medicaid Services) estimates that the government will save about 12 billion dollars by cutting the prices of these 15 medicines.
Are pharmaceutical companies scared? Why is there controversy?
Many companies claim that this will affect the research of new medicines. But health experts say that medicines that save people’s lives should be affordable. This means that this decision could also be the beginning of a drug price war in America.
Could Americans’ drug spending be halved by 2027?
Not every drug will be available at half price, but a significant reduction in costs for Medicare patients is certain. The move is expected to provide direct relief to the elderly, savings to families and reduced pressure on the healthcare system.