By Fineline Cube 
The U.S. Centers for Medicare & Medicaid Services (CMS) announced results of the second round of prescription drug price negotiations under the Inflation Reduction Act (IRA), with 15 drugs securing an average 62% price reduction and a maximum cut of 85%, delivering projected taxpayer savings of $12 billion and $685 million in out‑of‑pocket savings for Medicare enrollees in 2027.
Negotiation Results Summary
| Brand Name | Company | 30‑Day Cost (USD) | Original Price (USD) | Reduction |
|---|---|---|---|---|
| Ozempic/Rybelsus/Wegovy (semaglutide) | Novo Nordisk | 274 | 959 | ‑71% |
| Trelegy Ellipta (fluticasone/umeclidinium/vilanterol) | GSK | 175 | 654 | ‑73% |
| Xtandi (enzalutamide) | Astellas | 7,004 | 13,480 | ‑48% |
| Pomalyst (pomalidomide) | Bristol‑Myers Squibb | 8,650 | 21,744 | ‑60% |
| Ofev (nintedanib) | Boehringer Ingelheim | 6,350 | 12,622 | ‑50% |
| Ibrance (palbociclib) | Pfizer | 7,871 | 15,741 | ‑50% |
| Linzess (linaclotide) | AbbVie | 136 | 539 | ‑75% |
| Calquence (acalabrutinib) | AstraZeneca | 8,600 | 14,228 | ‑40% |
| Austedo/Austedo XR (deutetrabenazine) | Teva | 4,093 | 6,623 | ‑38% |
| Breo Ellipta (fluticasone/vilanterol) | GSK | 67 | 397 | ‑83% |
| Xifaxan (rifaximin) | Salix Pharma | 1,000 | 2,696 | ‑63% |
| Vraylar (cariprazine) | AbbVie | 770 | 1,376 | ‑44% |
| Tradjenta (linagliptin) | Boehringer Ingelheim | 78 | 488 | ‑84% |
| Janumet/Janumet XR (sitagliptin/metformin) | Merck | 80 | 526 | ‑85% |
| Otezla (apremilast) | Amgen | 1,650 | 4,722 | ‑65% |
Program Context & Market Impact
- Historical Precedent: The first IRA negotiation round in August 2024 covered 10 drugs with 38‑79% price cuts, effective 2026; this second round expands scope and average discount depth
- Pharma Revenue at Risk: The 15 drugs generated $45 billion in Medicare spending in 2024; the new pricing reduces manufacturer revenue by an estimated $28 billion annually when fully implemented
- Stock Reactions: Novo Nordisk fell 5.1% on Ozempic’s 71% cut; GSK declined 3.2%; AbbVie dropped 4.0% on combined Linzess/Vraylar exposure; Merck slid 2.8% despite Janumet’s 85% reduction being largely anticipated
- Taxpayer Savings: CMS projects $12 billion in Medicare savings in 2027 alone, rising to $85 billion over the first decade of the program
- Patient Impact: 7.2 million Medicare beneficiaries will see average out‑of‑pocket reductions of $95 per 30‑day prescription
Industry Implications
| Metric | 2025 Impact | 2027+ Outlook |
|---|---|---|
| Medicare Drug Spending | Flat vs. 2024 | ‑15% CAGR through 2030 |
| Pharma R&D Budgets | ‑2‑3% reallocation from price‑pressured areas | Increased focus on rare disease/orphan drugs |
| IRA Litigation | Industry appeals ongoing | Supreme Court review likely in 2026 |
| Private Payer Spillover | Minimal in 2025 | 30‑40% of commercial plans adopting reference pricing by 2028 |
- Reimbursement Strategy: Manufacturers are accelerating value‑based contracts and indication‑specific pricing to mitigate IRA impact
- Pipeline Shift: Companies like Pfizer and BMS have already announced 30% cuts in primary care R&D, redirecting investment to oncology and rare disease where IRA negotiation risks are lower
Forward‑Looking Statements
This brief contains forward‑looking statements regarding CMS drug price negotiation impacts, pharmaceutical industry revenue effects, and Medicare savings projections. Actual results may differ materially due to legal challenges, policy changes, and varying manufacturer compliance.-Fineline Info & Tech