WASHINGTON — On Tuesday, the Trump administration celebrated drug price cuts it had secured through a Democrat-created program — despite Republicans’ longstanding antipathy toward the policy.
The Inflation Reduction Act, a 2022 law supported solely by Democrats and signed into law by then-President Biden, allowed the Trump administration to secure lower prices on 15 drugs for Medicare recipients, including popular GLP-1s like Wegovy and Ozempic.
Centers for Medicare and Medicaid Services Director Mehmet Oz bragged that the latest round of negotiations yielded even greater price cuts than the Biden administration scored last year, when officials set prices for 10 medications. Oz said the Trump administration had used “the same process with a bolder direction,” adding the Biden administration’s negotiations were “modest” by comparison.
“Whether through the Inflation Reduction Act or President Trump’s Most Favored Nation policy, this is what serious, fair, and disciplined negotiation looks like,” Chris Klomp, CMS deputy administrator and Medicare director, said in a statement about the negotiations.
The Trump administration’s endorsement of the law is a far cry from how Republicans previously talked about the negotiations made possible by the 2022 law. GOP lawmakers had suggested the drug negotiation would keep lifesaving drugs from patients who need them and even “destroy new cures before they come to the market.”
In 2023, Sen. Mike Crapo (Idaho) said the law’s drug negotiation provision “ignores economic realities,” and Sen. Bill Cassidy (La.) denounced the negotiations as “partisan price controls.” Rep. Jason Smith (Mo.), chair of the House Ways and Means Committee, previously said the law was “radically dismantling Medicare’s promise to America’s seniors.”
Trump administration quietly unveils new round of Medicare-negotiated drug prices
But on Tuesday, the Trump administration said the negotiations would bring “meaningful relief to millions of Americans.”
This marked change suggests there are some areas of new bipartisan agreement in health policy, despite an administration that has pushed an aggressive reform agenda that has upended the American health establishment. It also highlights how Trump himself may be forging a new health agenda for his party, one focused in part on tighter government control of drug prices.
“It becomes really difficult now — which we’re delighted about and patients should be pleased by — for the [Republican] party to say this isn’t effective or to say the law won’t work or will undermine innovation,” said Merith Basey, executive director of the advocacy group Patients for Affordable Drugs. “If the GOP moves to undermine this law, they will do so at their own political risk.”
Trump’s push to the center on health care issues goes beyond the use of the IRA. Earlier this week, the White House weighed a proposal that would, with some new restrictions, extend Affordable Care Act subsidies — just weeks after Republicans rejected Democrats’ demands on the matter, resulting in the longest government shutdown in history.
And the president has pushed aggressive price cuts for drug companies, repeatedly threatening to use a host of federal powers, from drug approval processes to 100% tariffs, to force prices down if companies don’t volunteer to do so themselves. Through that approach, the administration has secured prices that, for some drugs, are lower than those set through the IRA (and are expected to be used instead of the law-based negotiation) — though the voluntary agreements could be broken at any time.
Trump’s approach on health care — at odds with his party’s laissez-faire philosophy — could not only reshape Republicans’ health care agenda but also make new government action politically viable in Washington.
“These days it’s rare to see this, unfortunately,” Anand Parekh, chief health policy officer at the University of Michigan School of Public Health, said in an email of the current administration’s IRA negotiations. “These negotiations are overall good financially for taxpayers and beneficiaries, and hopefully we’ll see better health outcomes as a result.”
New approaches, new questions
It’s unclear why the discounts secured through the IRA negotiations were greater under Trump than Biden — and whether previous, confidential agreements may have influenced the negotiations in any way.
The Biden administration negotiated prices that would have saved Medicare an estimated 22% on the cost of the 10 drugs that were then under discussion. The Trump administration, negotiating 15 drugs — including the expensive, high-demand semaglutide — estimated a 36% reduction.
The IRA pricing is set based on complex calculations and myriad factors across the pharmaceuticals market, and different drugs are selected for each round.
“I think it reflects, in part, there’s a longer list of drugs that were selected for the second round of negotiation and it included several cancer medications that likely had relatively low rebates to begin with,” Juliette Cubanski, deputy director of the Program on Medicare Policy at health policy research firm KFF, said of the larger discounts in the second round of negotiations. “So it would give the government much more room to negotiate lower prices, because the starting point was likely much higher than the ceiling that they had to get to at a minimum.”
Basey also said the average reductions per drug were “almost identical” to the first round of negotiations.
The savings come as the Trump administration has pushed drugmakers to offer lower prices, threatening more aggressive — and less predictable — actions against the industry than the Biden administration.
Those threats resulted in a series of secretive deals in which drugmakers pledged to lower their prices and in return get breaks on tariffs and preferential treatment for drug approvals.
But how those agreements may have influenced the IRA negotiations or will coexist with them remains unclear.
Under an earlier deal with the administration, for instance, GLP-1 makers agreed to sell some versions of the drug — Ozempic, Wegovy, Mounjaro, and Zepbound — to Medicare at $245 per month. In return, federal officials agreed to expand Medicare coverage of the drugs.
The IRA-based negotiations set the price at $276.78 a month for commonly used doses of Ozempic and Rybelsus, and $385.63 a month for the highest dose of Wegovy.
“Due to the terms and timelines of the negotiated deals, the MFN prices for covered GLP-1 drugs are expected to supersede the IRA prices,” a CMS spokesperson said in a statement.
STAT Plus: Biden’s law sets Trump up for success in negotiating cheaper Medicare drug prices
A spokesperson for Novo Nordisk added in a statement that the company “look[s] forward to additional clarity from CMS on how pricing and coverage will work together to support patient access as details are finalized.”
An Eli Lilly spokesperson made clear that the company preferred the voluntary deal made under Trump to the IRA negotiations required by law, saying the latter is “not a negotiation but a government price setting process that does nothing to increase affordability for seniors while hindering innovation.”
The spokespeople for Novo Nordisk and Eli Lilly did not respond to questions about why the semaglutide prices set through the IRA were different than the ones announced in the earlier deal with Trump, how long the companies planned to keep their voluntarily lowered prices, or whether the IRA negotiations were implicated in the confidential earlier deals with the administration.
Drug pricing experts and patient advocates worry the sometimes-deeper discounts through Trump’s dealmaking won’t last.
“I don’t know how sustainable [MFN] is,” Sean Sullivan, a professor at the University of Washington who researches health economics, said, noting the IRA is more concrete because it’s a law. “If they were serious about MFN, they would put it in law, instead of one-off press releases.”
Trump, despite being the most powerful person in the GOP, continues to face resistance from his own party on some of his health care ideas. Early proposals from the White House to include sweeping drug pricing proposals in Republicans’ reconciliation package earlier this year were quickly dismissed by GOP lawmakers. And some Republicans in Congress have been skeptical about Trump’s latest ACA subsidy proposal.
In the meantime, Democrats are happy to take the credit where they can — especially after seeing success campaigning on making health care more affordable.
“Democrats took on Big Pharma by giving Medicare the power to negotiate on behalf of the tens of millions of seniors that want lower drug prices, while every Republican voted against it,” Sen. Ron Wyden (D-Ore.) said in a statement Tuesday. “Today’s announcement is a result of Democratic efforts to lower health costs for older Americans.”
Elaine Chen contributed reporting.