In early November, the Trump administration gathered pharmaceutical company executives at the White House, where President Donald Trump spoke with characteristic bluntness about reducing the price of what he called the “obesity drug.” Just two weeks later, his administration announced that Medicare had secured lower prices for several high-cost medications, most notably bringing the price of Ozempic and Wegovy down to around $274, generating savings estimated in the billions.
But behind this political celebration lies an essential, unmentioned element: the legal authority enabling these reductions came from the Inflation Reduction Act (IRA) of 2022, passed by Democrats and signed by former President Joe Biden, according to Newsweek.
Political Clash Over Drug Price Cuts
Data shows that semaglutide—the active ingredient in Ozempic—has become one of the costliest items in Medicare spending; Ozempic alone accounted for 2% of all Part D expenditures in 2022 before any formal price negotiations began. The current administration relied on this new authority to negotiate maximum fair prices for costly medications.
The administration now boasts of reducing the prices of Ozempic, Wegovy, Mounjaro, and Zepbound to $245, presenting this as a model of “tough negotiation” that saves public funds. White House documents state that these reductions will expand Medicare and Medicaid coverage for obesity drugs “at a lower cost to taxpayers.” CMS says it achieved “up to 71%” reductions in the second negotiation round, with savings estimated at $12 billion.
Democrats counter that the credit belongs not to the White House but to the IRA, which for the first time granted the government direct legal authority to negotiate with drug companies. When Ozempic and Wegovy were added to the negotiation list for 2025, Democratic Senator Ron Wyden mocked Trump, saying he “talked a lot about taking on Big Pharma but achieved nothing.” Democratic leaders also urged the White House to disclose the actual negotiated prices instead of “rebranding” the agreement for political gain.
Outside Washington, AARP welcomed the reductions as a “real breakthrough” for seniors, while pharmaceutical companies continue to file lawsuits challenging the 2022 law itself.
Political Battle Over Drug Price Cuts
Despite the controversy, three key points are clear:
First: The negotiated price reductions will officially take effect on January 1, 2027, but they stem from CMS selecting the group of 15 drugs in January 2025—a slow-moving process with long-term impact. The separate GLP-1 drug agreement offers faster relief but acts only as a bridge toward broader legal reductions.
Second: The growing use of semaglutide is placing significant strain on the Medicare budget. The KFF estimates that 3.6 million beneficiaries may become eligible for Wegovy coverage following the 2024 approval related to heart risks. The IRA helps prevent companies from shifting between brand versions by treating different formulations as a single product.
Third: The savings vary depending on calculation methods. While CMS cites $12 billion in total savings, net savings are estimated at around $8 billion, and other reports show an average reduction of 36% when new prices are applied to past spending data.
Legally, courts have begun dismissing some drug company lawsuits challenging the negotiation program, opening the door for expanded future coverage of obesity medications—especially now that semaglutide is officially part of the negotiation framework.
In the end, regardless of political positioning, the facts show that the major shift in the U.S. drug-budget landscape began with a law signed by Biden—even if Trump now appears at the forefront benefiting from it.