US Government Launches Third Round of Medicare Drug Price Negotiations

The Centers for Medicare & Medicaid Services (CMS) has announced the next phase of its Medicare price negotiations, naming 15 additional medications set for pricing reductions to take effect in early 2028. This marks the third round of negotiations under the Inflation Reduction Act, which aims to lower prescription drug costs for Medicare beneficiaries. The announcement follows the implementation of price cuts for the first group of ten drugs, which began in January 2024, despite ongoing legal challenges against the program.

Among the newly selected medications is Trulicity (dulaglutide), a widely used GLP-1 agonist from Eli Lilly for treating type 2 diabetes. Notably, this category also includes Ozempic (semaglutide) from Novo Nordisk, which was part of the previous negotiation round. Additional prominent drugs on the list are Biktarvy (bictegravir/emtricitabine/tenofovir alafenamide) from Gilead Sciences, aimed at HIV treatment, and Xeljanz (tofacitinib) from Pfizer, used for inflammatory conditions such as arthritis and ulcerative colitis.

Key Changes in the Latest Round of Negotiations

This round introduces a notable shift in the selection criteria. Unlike the first two rounds, where all drugs were covered under Medicare Part D, this group includes medications that are administered by healthcare professionals and fall under Medicare Part B. These include Botox, Entyvio, and Xolair.

In a significant development, CMS has also initiated a renegotiation process for Tradjenta (linagliptin), a type 2 diabetes medication by Boehringer Ingelheim. This drug was previously included in the second round of negotiations but is now up for further price reductions, highlighting CMS’s commitment to controlling drug costs.

Approximately 1.8 million Medicare beneficiaries utilized one or more of the drugs included in this latest announcement between November 2024 and October 2025. Collectively, these medications are projected to represent around $27 billion in Medicare’s prescription drug spending during that period, accounting for approximately 6% of total expenditures under Medicare Part B and Part D.

The Medicare price negotiations, enacted as part of former President Joe Biden‘s Inflation Reduction Act, align with initiatives from the previous Trump administration, such as most-favoured nation (MFN) pricing and direct-to-consumer sales channels. These efforts reflect a broader strategy to enhance affordability and accessibility of essential medications for millions of Americans.

As these negotiations progress, they continue to generate significant attention from stakeholders, including pharmaceutical companies, healthcare providers, and patients, all of whom are keenly aware of the potential implications for drug pricing and availability in the coming years.