The Centers for Medicare & Medicaid Services (CMS) has announced a significant reduction in Medicare spending on 15 major drugs used to treat cancer and chronic diseases. The savings amount to 44%, or $12 billion, compared to last year's expenditures. These reductions are part of the Trump Administration's efforts to lower healthcare costs for Medicare beneficiaries.
Starting January 1, 2027, the Maximum Fair Prices (MFPs) for these drugs will be implemented. This move will increase the total number of negotiated drugs to 25 when combined with those previously negotiated, effective January 1, 2026. The newly negotiated prices are expected to provide substantial savings for both beneficiaries and the Medicare program.
Health and Human Services Secretary Robert F. Kennedy, Jr., said, "President Trump directed us to stop at nothing to lower health care costs for the American people." CMS Administrator Mehmet Oz emphasized that this year's results are significantly better than previous outcomes due to a more assertive approach.
Chris Klomp, CMS Deputy Administrator and Medicare Director, highlighted the administration's commitment by saying, "Whether through the Inflation Reduction Act or President Trump’s Most Favored Nation policy, this is what serious, fair, and disciplined negotiation looks like."
The announcement underscores the administration's dedication to reducing prescription drug costs and ensuring access to essential medications at lower prices. Between January 1, 2024, and December 31, 2024, approximately 5.3 million people with Medicare Part D coverage used these drugs for various conditions like cancer and diabetes. These drugs represented about $42.5 billion in gross covered prescription drug costs under Medicare Part D during that period.
For more details on the Medicare Drug Price Negotiation Program: https://www.cms.gov/priorities/medicare-prescription-drug-affordability/overview/medicare-drug-price-negotiation-program
Information on IPAY 2027 MFP can be found here: https://www.cms.gov/files/document/fact-sheet-negotiated-prices-ipay-2027.pdf
An infographic on IPAY 2027 MFP is available at: https://www.cms.gov/files/document/infographic-negotiated-prices-ipay-2027.pdf
Information from this article can be found here.
