CMS announced on Nov. 25, 2025 that it had completed the second cycle of the Medicare Drug Price Negotiation Program, reaching agreements with manufacturers on negotiated maximum prices for all 15 selected drugs, per the agency's press release. The agency put net savings at 44 percent, about $12 billion, compared with 2021 list prices, and projected $685 million in out-of-pocket savings for Part D enrollees in 2027, when the new prices take effect. In January 2026, CMS selected the 15 drugs for the third negotiation cycle, whose prices take effect in 2028.
What changed?
The second cycle covers 15 Part D drugs, including semaglutide products such as Ozempic, that together accounted for tens of billions of dollars in annual Part D spending. Negotiations ran through the fall of 2025 under a statutory deadline of Nov. 30, and CMS beat it by five days. Each negotiated price is published alongside a public explanation of how CMS arrived at the number, per the agency's negotiated-prices page. The first cycle's prices, for 10 drugs, took effect Jan. 1, 2026, so 2026 is the first year enrollees see both rounds in the same plan year.
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Who is affected?
Medicare enrollees who take any of the negotiated drugs are the direct beneficiaries. The negotiated price is what Medicare pays manufacturers; what an individual pays at the pharmacy also depends on the Part D design, which since 2025 caps annual out-of-pocket drug spending at $2,000. Manufacturers of the selected drugs must participate by law or face escalating excise taxes on their drug sales. Employer plans and people with commercial insurance are not directly covered, though some state programs and payers benchmark against Medicare's negotiated prices.
What it means for you
If you are on Medicare and one of your prescriptions is on the second-cycle list, the new prices start Jan. 1, 2027, and drug plans must pass the savings through in their benefit designs. Check your plan's 2027 formulary when it is published in the fall, and compare plans during open enrollment using the Plan Finder at Medicare.gov. CMS's own drug-price pages list every negotiated price and the agency's explanation, so you can verify the figures for your specific medication rather than relying on secondhand summaries.
What happens next?
Manufacturers can contest the negotiation process in court, and several suits from earlier cycles are still moving through the federal judiciary. For the third cycle, CMS publishes draft and final guidance before negotiations begin, with the third round of prices taking effect Jan. 1, 2028. The program adds 15 more drugs each year on the current schedule, so the list of price-controlled drugs will keep growing, per the statute's phase-in.