The basics:
- CMS names 15 high-spend drugs for the next round of Medicare price talks
- List includes therapies from Novartis, Johnson & Johnson and Bristol Myers Squibb in NJ
- About 1.8M Americans used the drugs, totaling $27B in Medicare spending
- Negotiated prices are set to take effect Jan. 1, 2028
Medications from several New Jersey pharmaceutical giants are among the next 15 prescription drugs targeted by the federal government for price setting negotiations.
In a Jan. 27 press release, the U.S. Centers for Medicare and Medicaid Services released its list of high-spend drugs selected for the third round of the program.
The latest therapies picked include:
- Kisqali (breast cancer) and Cosentyx (psoriasis, arthritis) – Novartis, East Hanover
- Orencia (arthritis, autoimmune) – Bristol Myers Squibb, Lawrenceville
- Erleada (prostate cancer) – Johnson & Johnson, New Brunswick
Treatments developed through partnerships also appear on the list. Examples include Roche and Novartis’ Xolair for food allergies, chronic hives and other uses; as well as cancer drug Lenvima from Eisai and Merck.
Under the program’s timeline, drugmakers will have until the end of February to decide if they want to participate in talks. New prices will roll out Jan. 1, 2028, CMS said.
“We maintain our position that the IRA’s forced sale regime is deeply flawed and creates negative, long-term implications on patient access, R&D and future innovation,” a Bristol Myers Squibb representative shared in a statement with NJBIZ. “The program has not solved the real barriers to patient access and affordability, instead overlooking the biggest problem in patient affordability: how insurance plans determine patient out-of-pocket costs. BMS will continue to advocate for an environment that supports patient access and future innovation.”
Media representatives from Novartis, Johnson & Johnson and Merck did not immediately respond to a request for comment.
$27B in prescription spending
According to the administration, about 1.8 million Americans used one or more of the 15 drugs through Medicare Part D or Part B between November 2024 and October 2025. The batch of medications accounted for about $27 billion in prescription drug spending in Medicare over that timeframe. That figure is about 6% of total Part B and Part D spending, CMS said.
By allowing Medicare to have a say in setting drug prices for the first time in its six-decade history, the federal government aims to drive down the cost of prescription drugs for older Americans.
The initiative is part of former President Joe Biden’s signature Inflation Reduction Act. It allows CMS to directly negotiate with pharmaceutical companies over prices. Participation is voluntary. However, companies who choose not to engage face the option of paying excise taxes or terminating their relationship with Medicaid.
Despite the pharmaceutical industry’s longstanding opposition to the law and multiple failed lawsuits, negotiated prices on the first 10 drugs went into effect this year.
During the inaugural round of talks, the Biden administration said it reached a deal to lower the cost of some of the most commonly used drugs under Medicare by 38%-79% off list prices.
In November 2025, CMS said the prices hammered out for the next 15 drugs, starting in January 2027, will save Medicare 44% compared with recent annual spending, or about $12 billion.
That list includes Novo Nordisk’s massively popular GLP-1 drugs Ozempic, Wegovy and Rybelsus. The Danish company has its U.S. headquarters in Plainsboro.
‘Taking strong action’
In a statement, CMS Administrator Dr. Mehmet Oz said, “For too long, seniors and taxpayers have paid the price for skyrocketing prescription drug costs. Under President Trump’s leadership, CMS is taking strong action to target the most expensive drugs in Medicare, negotiate fair prices, and make sure the system works for patients — not special interests.”
This week’s announcement comes as the Trump administration works to implement its “most-favored-nation” pricing policy. The effort aims to help bring down American medication costs to either the same or lower as other developed countries.
Since calling on the industry last summer to voluntarily reduce costs, the White House has secured deals with 14 companies to cut prices for the government’s Medicaid program and for cash-paying consumers. Merck, Bristol Myers Squibb, Novartis, Sanofi, Novo Nordisk and Johnson & Johnson have all struck agreements to lower prescription drug costs in exchange for an exemption from U.S. pharmaceutical product tariffs.
Editor’s note: This story was updated at 4:47 p.m. Jan. 28, 2026, to include a statement from Bristol Myers Squibb.
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