Uncommon Knowledge: Trump Has Biden to Thank for $274 Oze...

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By Newsweek EditorsShareNewsweek is a Trust Project member

Early in November, the White House brought drug-company chiefs into the East Room, and President Donald Trump—never one for euphemism—talked about cutting the cost of what he called the “so-called fat drug.” Just two weeks later, his administration said Medicare had secured lower prices on several costly medicines—including $274 for Ozempic and Wegovy—with savings touted in the billions. But there is a twist beneath Trump's triumphalism—the power to make the cuts comes from the Inflation Reduction Act (IRA) of 2022, which was passed by Democrats and signed into law by then President Joe Biden. One number explains why semaglutide (the medication used in the drugs) has become the third rail of health-policy math: Ozempic alone accounted for 2 percent of all Medicare Part D spending in 2022, before Medicare could negotiate a cent.

Common Knowledge

Republicans say the reduced prices are what hard-nosed bargaining looks like. The Trump administration’s own fact sheet boasts that “the Medicare prices of Ozempic, Wegovy, Mounjaro, and Zepbound will be $245,” and frames the deal as dramatically cheaper than previous proposals. “Lower prices,” the document declares, will let Medicare and Medicaid cover anti-obesity drugs “at a dramatically lower cost to taxpayers.” Trump has hammered the point in plain language: Ozempic “costs too much…it’s very unfair.” And his Centers for Medicare and Medicaid Services (CMS) is crowing about the second-year haul: $12 billion in federal savings from negotiations covering 15 drugs used by 5.3 million beneficiaries, with individual price cuts “up to 71%.”

Democrats have answered that the bargaining leverage didn't come from the Oval Office—it came from their law. When the Department of Health and Human Services added Ozempic and Wegovy to the 2025 negotiation list, Democratic Senator Ron Wyden needled the GOP, saying, “Donald Trump spent his first four years…talking a big game about standing up to Big Pharma with nothing to show for it.” As the new prices neared, Wyden and Democratic Senate Minority Leader Chuck Schumer warned the White House to stop “bait-and-switch affordability” and simply release the negotiated numbers produced by the IRA.

Outside Washington, the AARP cheered the announcement as “relief from high drug prices” for seniors—while pharmaceutical company’s have sued over the 2022 law.

Uncommon Knowledge

Strip away the victory laps, and three facts matter.

First—the timeline reality. The 15-drug tranche that includes Ozempic and Wegovy stems from CMS’ January selection under the IRA; companies and CMS have spent 2025 negotiating “maximum fair prices.” Those negotiated prices must be finalized by late 2025 and take effect on January 1, 2027. That lag matters because today’s claims are tomorrow’s cuts. The administration’s separate GLP-1 “deal” promises interim relief for Medicare and Medicaid patients sooner, but the statutory negotiation program is what locks in durable, national prices. Think of the White House bargain as a bridge—and the IRA schedule as the concrete.

Second—the GLP-1 shock. Why do politicians obsess over semaglutide? Because it’s already bending Medicare’s cost curve. KFF estimates 3.6 million Medicare enrollees could now be eligible for Wegovy coverage thanks to its 2024 cardiovascular-risk indication. The IRA helps by letting CMS negotiate across all semaglutide formulations (shot, pill; diabetes or heart-risk label) as one product, reducing gamesmanship across brands (which include Ozempic, Wegovy and Rybelsus)—a quietly crucial design choice.

Third—the numbers under the numbers. The government’s savings tallies differ because they measure different things. CMS emphasizes $12 billion in gross federal savings if 2027 prices were applied to a recent year’s use; officials peg net savings closer to $8 billion after Part D changes. According to the Associated Press, the second round’s cut comes out to roughly 36 percent if retrofitted to past spending. The program’s scope is clear: 15 drugs this year affecting around 5.3 million beneficiaries, with drug-level reductions in the dozens of percent.

There are too legal footnotes. One, the courts have started swatting away some industry challenges to the negotiation program, though litigation persists and could yet reshape pieces of it. Two, because semaglutide is now explicitly inside Medicare’s bargaining tent, the political incentive to expand coverage for anti-obesity use has grown—exactly as analysts predicted when Wegovy picked up a heart-risk indication and CMS cracked the door to limited coverage. Coverage plus negotiation is the policy combo.

Whatever you think of the the drugs in question, Trump has Biden to thank for the fiscal center of gravity moving.

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