Medicare Lowers Costs on 15 Essential Drugs
On a recent morning at the Grand Forks Senior Center, volunteers said the most common question is simple: “Will my meds finally cost less this year?” That answer edged closer to “yes” as Medicare announced price cuts for 15 widely used prescription drugs — including the diabetes medication Ozempic — under its drug negotiation authority, according to the Centers for Medicare & Medicaid Services (CMS). The agency said the new, negotiated prices will be reflected in Part D plans after finalization, with savings showing up at the pharmacy counter at the start of the applicable plan year per CMS.
For Grand Forks, where thousands of residents are enrolled in Medicare, the reductions promise immediate relief on chronic-condition staples, from diabetes to heart disease. Local pharmacists say medications in these categories drive a large share of out-of-pocket spending, a pressure that’s intensified as more patients consider newer GLP-1 drugs like Ozempic to manage diabetes.
Historical Context and Policy Background
Medicare’s ability to negotiate drug prices stems from the Inflation Reduction Act (IRA) of 2022, which for the first time authorized CMS to set maximum fair prices on high-spend, single-source drugs in Part D and, later, Part B. The program phases in: 10 drugs for 2026, 15 more for 2027, and additional rounds thereafter, according to a KFF explainer. CMS publishes selected drug lists and conducts a structured, months-long negotiation with manufacturers before prices take effect.
Drug affordability has been a longstanding challenge, with older adults often facing coinsurance tied to list prices. The IRA layered several protections beyond negotiation, including a $2,000 annual out-of-pocket cap starting in 2025 and the option to spread costs across the year, as summarized by KFF. Health policy analysts say the negotiation program targets the highest-spend products first, aiming to lower costs without disrupting access to medicines seniors use most.
Impact on Grand Forks Residents
A drop in negotiated prices can translate into lower premiums over time and smaller pharmacy bills for those paying coinsurance tied to a drug’s price, according to CMS program guidance. For a patient in Grand Forks managing Type 2 diabetes, a lower plan-negotiated price on a covered drug could reduce per-fill costs and help them avoid hitting the deductible and catastrophic tiers as quickly.
Local providers expect practical gains: fewer skipped doses, more stable refill patterns, and less pressure to switch from effective medications solely for cost reasons. While the exact savings will vary by plan and drug, federal budget analysts project the negotiation policy will reduce Medicare spending systemwide, with the Congressional Budget Office estimating tens of billions in savings over a decade from the IRA’s drug provisions overall per CBO. That should ease premium growth for beneficiaries in Grand Forks County as plans adapt to lower acquisition costs.
Quick help for residents:
Compare plans during Medicare’s Open Enrollment (Oct. 15–Dec. 7) using the Medicare Plan Finder to see updated prices and coverage.
Schedule a no-cost benefits review through North Dakota’s State Health Insurance Counseling (SHIC) program at the ND Insurance Department: SHIC or 1-888-575-6611.
Ask your pharmacist — Altru Pharmacy and other local pharmacies can check real-time plan prices and lower-cost therapeutic alternatives.
Expert Opinions and Reactions
Patient advocates, including AARP, have backed Medicare negotiation as a long-awaited tool to curb costs for older adults and people with disabilities, noting that seniors are most exposed to price hikes for chronic medications (see AARP’s position). Health economists generally expect the largest near-term impact where a few drugs account for outsized Part D spending, a pattern CMS highlights in its annual drug spending dashboards.
Drugmakers and industry groups have criticized the program as government price-setting and have pursued multiple legal challenges, arguing it could dampen research incentives; the Pharmaceutical Research and Manufacturers of America (PhRMA) outlines its position on its policy pages (PhRMA). Republican lawmakers have echoed those concerns, while supporters counter that negotiation targets older, high-spend products and preserves innovation incentives on newer drugs, per KFF’s analysis. Expect continued debate as more drugs enter the negotiation pipeline and results show up in premiums and out-of-pocket trends.
Looking Ahead: What This Means for the Future
If early savings materialize as CMS projects, Grand Forks beneficiaries could see steadier premiums and more predictable pharmacy costs, especially when combined with the $2,000 out-of-pocket cap in 2025. Employers and local health providers will watch closely for formulary adjustments as plans realign around the new price benchmarks, with attention to diabetes and cardiovascular drugs that dominate local prescribing.
Next rounds of negotiations will add more drugs in subsequent years under IRA timelines, with CMS publishing proposed lists, opening data submissions, and finalizing maximum fair prices before those prices take effect. Beneficiaries should look for Annual Notice of Change letters from plans each fall and check the Plan Finder to verify that their drugs — including Ozempic and alternatives — remain on formulary at the expected price.
What to Watch
CMS will finalize negotiated prices and update the Medicare Plan Finder ahead of Open Enrollment, when beneficiaries can switch plans to capture savings.
Expect further legal and political challenges alongside additional negotiation rounds, which could influence how quickly savings filter into premiums and pharmacy counter prices.
Locally, SHIC counselors, Altru Pharmacy, and the Grand Forks Senior Center will be key resources as residents compare plans and confirm drug-specific costs for 2025 and beyond.
