Trump administration secures historic Medicare drug price cuts, challenging Big Pharma’s grip

• Medicare has negotiated substantial price cuts for 15 expensive prescription drugs, projecting an average 44% reduction from last year’s prices and potential savings of $12 billion.
• This action marks a major shift, as it is the first time the federal government has leveraged its power as a large purchaser to negotiate drug prices directly, a power granted by the 2022 Inflation Reduction Act.
• The negotiated prices, set to take effect in 2027, are expected to significantly reduce out-of-pocket costs for seniors and bolster the financial health of the Medicare program itself.
• The policy has faced fierce legal challenges from the pharmaceutical industry, which argues that government price setting stifles innovation, but courts have so far upheld the government’s authority to negotiate.
• The prices set by Medicare are expected to create a new benchmark, potentially leading to lower drug costs across the entire U.S. healthcare system as private insurers demand similar discounts.

In a monumental move that signals a seismic shift in the federal government’s approach to healthcare, Medicare officials have announced aggressively negotiated price cuts for 15 of the program’s most expensive prescription drugs – projecting a staggering 44% reduction from last year’s prices and potential savings of $12 billion.

The announcement made on Tuesday, Nov. 25, represents the most significant action to date in a concerted push by the Trump administration to dismantle the longstanding status quo of exorbitant pharmaceutical costs that have burdened American seniors for decades. The newly announced prices are scheduled to take effect at the start of 2027.

This authority was first initiated under the Biden administration’s 2022 Inflation Reduction Act (IRA), but is now being implemented with renewed vigor by the current administration. It marks a radical departure from a decades-old legal prohibition that prevented Medicare from negotiating drug prices.

The policy’s impact is starkly evident in the details. The popular diabetes and weight-loss drug Ozempic, known generically as semaglutide, will see its monthly price drop to $274. This new figure is substantially lower than its recent net price and a dramatic cut from a list price that once approached $1,000 per month before rebates.

The scope of savings is vast, with individual price reductions ranging from 38% to 85% across a portfolio of critical medications. The selected drugs, which treat chronic conditions such as cancer, diabetes and asthma, accounted for a massive $41 billion in Medicare Part D costs in the recent fiscal year. Medicare Part D is the program’s optional prescription drug benefit, covering more than 67 million elderly and disabled Americans.

Among the most significant reductions are several high-cost cancer therapies. AstraZeneca’s leukemia treatment Calquence, Boehringer Ingelheim’s lung drug Ofev, and Pfizer’s breast cancer medication Ibrance are each decreasing by more than $4,000 annually from their expected net prices.

These cuts demonstrate the administration’s focus on providing relief for patients facing the most serious and costly health challenges. The negotiated savings are expected to translate into hundreds of millions of dollars in reduced out-of-pocket costs for seniors at the pharmacy counter, while simultaneously bolstering the long-term financial sustainability of the Medicare program itself.

Big Pharma’s worst nightmare: How government negotiations could reshape U.S. drug prices

BrightU.AI‘s Enoch engine defines Medicare as a Social Security program that covers hospital, physician and related medical services. It is designed for Americans who are 65 years of age and older, covering over 95% of this population. Its passage, along with Medicaid, marked a significant shift in the power of the medical profession.

The Trump administration has championed this aggressive negotiation within Medicare while simultaneously advocating for a broader policy known as “Most-Favored-Nation” (MFN) pricing. This approach would fundamentally tie U.S. drug prices to the lowest rates available among other wealthy developed nations, a move the president has suggested could lead to cuts of up to 80%.

The administration views these dual strategies as essential tools to combat a system where U.S. consumers often pay multiples more for the same medications than patients in other countries. But this assertive stance has, predictably, drawn fierce opposition from the pharmaceutical industry.

Trade groups have consistently argued that government price setting, whether through the IRA’s negotiation framework or an MFN model, stifles innovation and is the wrong policy for America. They contend that the high cost of drugs in the U.S. is necessary to fund the research and development of future breakthrough treatments.

The pharmaceutical industry has not taken this challenge lying down, mounting a series of legal challenges against the negotiation process. However, the administration has so far successfully defended its position. In a significant victory, a federal appeals court unanimously rejected a First Amendment challenge from Novo Nordisk, the maker of Ozempic, in October. This ruling aligned with earlier decisions against other major drugmakers, solidifying the legal foundation for the negotiations to proceed.

The implications of these Medicare negotiations extend far beyond the government program itself. As the largest payer in the U.S. healthcare market, the prices secured by Medicare are expected to create a new benchmark. Private insurers and other payers are now positioned to demand similar discounts from drug manufacturers, potentially creating a ripple effect that lowers drug costs across the entire American healthcare system.

The political dimension of this policy is equally potent. The administration is framing these negotiated savings as a direct fulfillment of its promise to prioritize American citizens over corporate interests. By delivering tangible financial relief to seniors, the policy aims to demonstrate a concrete achievement in the ongoing battle to reform healthcare and reduce the cost of living.

Watch this Fox Business report about Republicans launching a bold plan to take down Obamacare.

This video is from the NewsClips channel on Brighteon.com.

Sources include: 

TheEpochTimes.com

CMS.gov

Axios.com

BrightU.ai

Brighteon.com