Discover how the Trump Administration’s drug pricing policies impact Medicare negotiations, pharmaceutical companies, and global markets in 2025 and beyond.
The pharmaceutical sector has been a major focus for the Trump Administration, particularly in terms of regulatory changes and drug pricing policies. While previous administrations, including President Joe Biden’s, took steps to address drug pricing concerns, President Donald Trump has indicated that his administration will continue these efforts but with an emphasis on transparency and efficiency.
With the Inflation Reduction Act of 2022 already in motion, which allowed Medicare to negotiate drug prices for the first time, the big question is: how will the Trump Administration impact this framework? Will drug-pricing reforms stay intact, and how will global pharmaceutical markets respond?
Medicare Drug Price Negotiation: A New Landscape Under Trump
The Inflation Reduction Act introduced groundbreaking provisions allowing the Department of Health and Human Services (HHS) to negotiate prices for select prescription drugs under Medicare. This change marked a major shift in US healthcare policy, impacting drugmakers, healthcare providers, and patients alike.
The law mandates that a set number of high-cost drugs under Medicare Part D (outpatient drugs) and Part B (physician-administered drugs) be chosen for negotiation each year. The schedule includes:
- 2026: 10 Medicare Part D drugs
- 2027: 15 Medicare Part D drugs
- 2028: 15 Medicare Part B and D drugs
- 2029 and beyond: 20 Medicare Part B and D drugs annually
In total, over 60 drugs will be subject to government-negotiated pricing over the next several years, significantly altering pharmaceutical pricing dynamics in the US.
Trump Administration’s Position on Drug Pricing
Despite concerns over potential rollbacks, the Trump Administration has confirmed it will continue with the Medicare Drug Price Negotiation Program. However, a key shift will be in greater transparency in the negotiation process. According to the Centers for Medicare and Medicaid Services (CMS), the administration will encourage industry and stakeholder input to ensure that the program balances cost savings with continued pharmaceutical innovation.
Which Drugs Are Affected?
Under the new phase of negotiations, 15 additional drugs were selected in January 2025 for pricing discussions, with new rates expected to take effect in 2027. These include major diabetes, respiratory, and cancer drugs:
Notable Drugs in the Negotiation Process:
- Diabetes Treatments: Novo Nordisk’s Ozempic, Wegovy, Rybelsus; Boehringer Ingelheim’s Tradjenta; Merck’s Janumet/Janumet XR
- Respiratory Drugs: GSK’s Trelegy Ellipta, Breo Ellipta
- Cancer Treatments: Astellas/Pfizer’s Xtandi, Bristol-Myers Squibb’s Pomalyst, Pfizer’s Ibrance, AstraZeneca’s Calquence
- Other Drugs: AbbVie’s Vraylar, Amgen’s Otezla, Boehringer Ingelheim’s Ofev, AbbVie’s Linzess, Salix Pharmaceuticals’ Xifaxan, Teva’s Austedo/Austedo XR
These 15 drugs will join the previously negotiated 10 drugs, whose new prices will take effect in 2026.
Impact on Global Pharma Markets
The Trump Administration’s continuation of drug price negotiations will have ripple effects on the global pharmaceutical industry.
Key Global Implications:
- Pricing Pressure on Multinational Drugmakers: As the US is the world’s largest pharmaceutical market, reduced pricing in Medicare could set a precedent for other nations to seek lower drug costs.
- Impact on Research & Development: With anticipated revenue declines from Medicare-covered drugs, pharma companies may shift their R&D focus toward non-Medicare-covered treatments or rare diseases.
- Market Strategy Adjustments: Drugmakers may reassess launch strategies, favoring markets with higher profitability margins and pushing for innovation in biosimilars and generics to maintain revenue streams.
Final Thoughts: A Shift in US Drug Pricing Dynamics
The Trump Administration’s stance on drug pricing maintains the trajectory set by the Inflation Reduction Act but introduces a greater emphasis on transparency and stakeholder engagement. While cost savings for consumers remain a priority, pharmaceutical companies will need to adapt to this evolving regulatory environment, potentially shifting their global strategies in response.
As negotiations continue, the US pharma landscape will witness significant shifts—ones that will inevitably impact both domestic healthcare costs and international pharmaceutical markets. The coming years will determine how effectively these policies balance affordability with continued drug innovation.
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