💊 CMS unveils deep IRA drug cuts, impacting oncology spend

CMS announced a 44% average price cut for 15 high-spend drugs, including key oncology agents, which will take effect in 2027 and yield $12B in Medicare savings.

Why It Matters To Oncology

▪ Negotiated drugs include Xtandi (enzalutamide) for prostate cancer and Ibrance (palbociclib) for breast cancer.

▪ Lower costs may improve patient access and adherence, impacting clinical outcomes and trial enrollment.

▪ Signals further scrutiny on oncology drug pricing and value-based care.

The Financials

▪ The 15 drugs accounted for $42.5B in 2024 Medicare Part D spend (15% of total).

▪ Semaglutide (Wegovy/Ozempic) topped spending at $15.2B; Novo Nordisk agreed to a 71% discount, lowering monthly cost to $274.

▪ Oncology drugs Xtandi, Ofev, and Ibrance will see prices slashed by ~50%, with new monthly costs of $7,004, $6,350, and $7,871, respectively.

▪ CMS estimates $685M in annual out-of-pocket savings for Medicare recipients.

What They're Saying

▪ Stock reaction for Novo Nordisk was minimal post-announcement.

▪ Some discounts are less than recent direct-to-consumer deals, e.g., Wegovy available at $350/month via TrumpRx versus $274/month for Medicare.

What's Next

▪ Discounted prices for this second batch begin January 2027; the first batch (including Eliquis and Januvia) takes effect in 2026.

▪ Expect ongoing debates over drug pricing, reimbursement, and implications for innovation in oncology drug discovery.