Medicare's second round of negotiated drug prices starts January 1, 2027

On January 1, 2027, the negotiated prices for 15 more prescription drugs take effect in Medicare Part D — and on the same day, four drugs from the first round leave the program entirely.

Neither of those is a surprise announcement. The negotiation for this second cycle closed on November 1, 2025, and CMS published the resulting prices on November 25, 2025. What happens in January is that the prices start to bind, and the deselections take effect at the same time. If you take one of these drugs, both halves of that sentence affect your bill.

The 25-drug count, and the 21 that will actually be in force

CMS describes the second cycle as bringing the program to 25 negotiated drugs — the 10 selected for 2026 plus the 15 selected for 2027. That count is correct as a matter of what has been negotiated. It is not what will be in force on January 1.

Four of the first-round drugs leave the selected drug list that day, because the statute drops a selected drug once a generic or biosimilar has been approved, licensed and marketed. So on January 1, 2027 the number of drugs carrying a maximum fair price is 21, not 25 — six survivors from the first cycle plus the 15 new ones. The four departures are listed further down; the reason this is worth stating is that a headline count and the price list a pharmacy works from are not always the same number.

What a “maximum fair price” is — and what it is not

The statute calls the negotiated figure the maximum fair price (MFP). Three limits matter more than the headline:

• It is a price ceiling, not your copay. The MFP caps what a manufacturer may charge for a selected drug when it is dispensed to someone with Medicare drug coverage. What you pay still runs through your plan’s benefit design — deductible, tier placement, copay or coinsurance, formulary and pharmacy network. Two people on the same drug in different plans can pay different amounts on the same day.
• CMS’s savings figure is modeled, and CMS says so. The agency projects that enrollees will save about $685 million in out-of-pocket costs in 2027 — “under the defined standard benefit design.” That is a standard-benefit assumption, not a promise about your plan.
• It does not set prices outside Medicare. The negotiated price applies to selected drugs dispensed to Part D enrollees. It is not a cash price, and it does not govern what a commercial plan or an uninsured purchase costs.

The program itself is contested, and has been since it was enacted: manufacturers have challenged it in court, and the statute limits both administrative and judicial review of the Secretary’s price determinations. The Congressional Research Service report cited at the end of this article sets out the program’s structure and those review limits. Everything above is what CMS has published — it is a description of the rules, not a position on whether the rules are the right policy.

Medicare is a federal program, but which Part D plans are sold — and what they put on which tier — varies by state and county, so the plan-level detail has to come from your own plan’s 2027 materials.

The 15 drugs, and the prices

Every figure below is CMS’s, from the fact sheet for initial price applicability year 2027. “List price” is the wholesale acquisition cost for a 30-day supply using 2024 prescription fills; the negotiated price is the maximum fair price for a 30-day supply for calendar year 2027. Some rows cover more than one brand name because the program treats them as a single selected drug.

Selected drug	Commonly treated conditions	List price, 2024	Negotiated price, 2027	Reduction
Ozempic; Rybelsus; Wegovy	Type 2 diabetes; cardiovascular disease; obesity/overweight	$959	$274	71%
Trelegy Ellipta	Asthma; chronic obstructive pulmonary disease	$654	$175	73%
Xtandi	Prostate cancer	$13,480	$7,004	48%
Pomalyst	Multiple myeloma; Kaposi sarcoma	$21,744	$8,650	60%
Ofev	Idiopathic pulmonary fibrosis	$12,622	$6,350	50%
Ibrance	Breast cancer	$15,741	$7,871	50%
Linzess	Chronic idiopathic constipation; irritable bowel syndrome with constipation	$539	$136	75%
Calquence	Chronic lymphocytic leukemia / small lymphocytic lymphoma; mantle cell lymphoma	$14,228	$8,600	40%
Austedo; Austedo XR	Chorea in Huntington’s disease; tardive dyskinesia	$6,623	$4,093	38%
Breo Ellipta	Asthma; chronic obstructive pulmonary disease	$397	$67	83%
Xifaxan	Hepatic encephalopathy; irritable bowel syndrome with diarrhea	$2,696	$1,000	63%
Vraylar	Bipolar I disorder; major depressive disorder; schizophrenia	$1,376	$770	44%
Tradjenta	Type 2 diabetes	$488	$78	84%
Janumet; Janumet XR	Type 2 diabetes	$526	$80	85%
Otezla; Otezla XR	Oral ulcers in Behçet’s disease; plaque psoriasis; psoriatic arthritis	$4,722	$1,650	65%

The conditions column is the list CMS publishes for each selected drug, limited to uses for which Medicare coverage or payment is currently available; CMS states the list is not intended to be exhaustive, so a selected drug may be prescribed for other conditions as well.

The reductions run from 38% (Austedo) to 85% (Janumet). The prices are per selected drug, and the MFP is applied per dosage form and strength rather than as one flat number: CMS publishes a file showing the price for each package. To take the largest row as an example, the per-package maximum fair prices are $276.78 for a 4 mg/3 mL Ozempic pen, $276.78 for a 30-tablet package of 7 mg Rybelsus, and $385.63 for four 2.4 mg/0.75 mL Wegovy pens.

Two context numbers, both from the same fact sheet: about 5.3 million of the 53 million people with Part D coverage were dispensed one of these 15 drugs in 2024, and those drugs accounted for $42.5 billion — roughly 15% of total Part D gross covered drug costs that year. Enrollees paid $1.7 billion out of pocket for them. CMS estimates that if the negotiated prices had been in effect in 2024 they would have cut net covered drug costs by about $12 billion, or 44%; including Coverage Gap Discount Program spending, about $8.5 billion, or 36%.

The four drugs that leave the program on January 1, 2027

A deselection is not a policy reversal and not a decision the manufacturer gets to make. It is a statutory trigger: a selected drug stops being selected once the FDA has approved a generic — or licensed a biosimilar — that names the selected product as its reference, and that product is marketed.

Selected drug	Determination	Removal effective
Stelara	October 2025	January 1, 2027
Entresto	October 2025	January 1, 2027
Xarelto	October 2025	January 1, 2027
NovoLog; NovoLog FlexPen; NovoLog PenFill; Fiasp; Fiasp FlexTouch; Fiasp PenFill	March 2026	January 1, 2027
Xeljanz; Xeljanz XR	June 2026	January 1, 2029

(The fifth row is included for completeness: Xeljanz, selected for the third cycle, has already been deselected with removal set for 2029. It is not one of the January 1, 2027 departures.)

The practical reading: if you take one of the drugs in the first four rows, the maximum fair price that applied during 2026 will not be there in 2027, and the reason is that a competing product now exists. That is a different situation from a price going back up, and it is worth asking your plan or pharmacist directly which product is the covered option for 2027 — the generic or biosimilar may sit on a different tier with a different copay than the brand did.

The other January 1 change, which runs the other way

The negotiation is not the only Part D number that moves on January 1. In the rate announcement CMS published on April 6, 2026, the standard Part D benefit parameters for 2027 are:

Standard Part D benefit	2026	2027
Deductible	$615	$700
Annual out-of-pocket threshold	$2,100	$2,400
Initial-coverage coinsurance	25%	25%

Both figures move by the formula in the statute rather than by an annual policy choice, and for some beneficiaries the effect is that cost sharing continues for longer before the year’s covered drugs become free. The standard amounts are also the statutory reference design, not a plan-specific figure: what your plan actually charges is in its 2027 plan materials, and beneficiaries with the full Low-Income Subsidy (Extra Help) have a $0 deductible in both years. So “the negotiated price lowered my drug” and “my Part D costs went up” can both be true in the same year.

Round three has already been selected — and it is the first with Part B drugs

On January 27, 2026, CMS named the 15 drugs for the third cycle, plus one drug for renegotiation. This is the first cycle to reach Part B drugs — the ones Medicare pays for when they are administered in a clinic or infusion center rather than bought at a pharmacy — alongside Part D drugs. The 15 selected drugs are Trulicity, Biktarvy, Orencia, Cosentyx, Erleada, Kisqali, Entyvio, Verzenio, Botox, Lenvima, Xolair, Rexulti, Xeljanz, Anoro Ellipta and Cimzia; Tradjenta, which was selected in the second cycle, was picked for renegotiation. (CMS notes that listing Botox by its manufacturer’s brand name does not change Medicare coverage or payment when it is used cosmetically.)

Those drugs accounted for about $27.0 billion — roughly 6% of total Part B and Part D expenditures — between November 2024 and October 2025, and about 1,777,000 people used one of them in that period. CMS’s own wording for this cycle is that any negotiated prices “will become effective beginning in 2028”; the first two cycles took effect on January 1 of their applicability year, in 2026 and 2027. Either way, nothing in round three changes what you pay in 2027 — it is listed here because selection announcements are easy to mistake for price announcements.

What to do before December 7

Medicare open enrollment runs October 15 to December 7, 2026, and every change above takes effect January 1.

1. If you take one of the 15 drugs, do not assume your copay falls by the headline percentage. Enter your prescriptions and your plan into the Plan Finder on Medicare.gov and read the tier and cost-sharing line for 2027.
2. If you take Stelara, Entresto, Xarelto, NovoLog or Fiasp, ask your plan what the covered product is for 2027 and what it costs. The maximum fair price is gone; a competing product is the reason.
3. Add the deductible and the out-of-pocket threshold to the comparison. $700 and $2,400 are the standard benefit amounts, not your plan’s, but a plan that looks cheaper on premiums can cost more once the deductible and tier placement are in.
4. If your drug costs land early in the year, ask about the Medicare Prescription Payment Plan. Every Part D plan offers it, participation is voluntary and free, and it spreads your out-of-pocket drug costs across the calendar year instead of billing them at the counter. It changes when you pay, not what you owe.
5. Hang up on anyone who offers to “enroll you” in the new drug prices. There is no enrollment, no application and no fee — the price is the price the pharmacy charges. Open enrollment is peak fraud season, and the tells are collected in Medicare open enrollment 2027.

Bottom line

The second round of negotiated prices takes effect on January 1, 2027, and it is a real reduction for people who take one of the 15 drugs. But the number that matters to you is not in the press release: the maximum fair price is a ceiling on what the manufacturer charges, your share is set by your plan’s design, four first-round drugs lose their negotiated price on the same day for competition reasons, and the standard deductible and out-of-pocket threshold both rise. Check your own drugs in the Plan Finder before December 7, 2026.

The plan-shopping checklist is in Medicare open enrollment 2027, the county-level availability picture is in Your Medicare Advantage plan may not be there in 2027, and a survey of the network’s guides is at omc.center/resources.