US Medicare lays out timeline for third round of drug price negotiations
For the first time, the list would include drugs payable under Medicare Part B - which covers medicines administered in a doctor's office or hospital - in addition to prescription drugs covered under Medicare Part D, CMS said.
WHY IT'S IMPORTANT
The drug price negotiation process was established under President Joe Biden's signature Inflation Reduction Act in 2022. The first round included drugs among the most expensive for Medicare insurance plans covering people aged 65 years and older or with disabilities.
After facing criticism from the pharmaceuticals industry, President Donald Trump's administration had previously promised "greater transparency" in the process.
CONTEXT
CMS announced prices for ten drugs in August 2024, in its first round of cuts following a year of talks. The second round, which includes negotiations for 15 drugs such as Novo Nordisk's blockbuster diabetes medicine Ozempic, is currently underway and a final decision on prices is due by November 30, 2025.
Negotiated prices for the third round will take effect on January 1, 2028. Additionally, CMS said it was seeking public comment on various topics to enhance transparency and reduce the administrative burden for participating manufacturers.
Earlier in the day, Trump signed a wide-reaching executive order directing drugmakers to lower their prices to align with what other countries pay, a measure that analysts and legal experts have cautioned will be difficult to implement.
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Key Points Medtronic is separating out its lower-margin diabetes care segment. It's also pouncing on a massive opportunity in robotic-assisted surgery. The healthcare leader has a terrific dividend-growth track record. 10 stocks we like better than Medtronic › Medical device specialist Medtronic (NYSE: MDT) has not been the best of investments over the past five years. The stock has significantly lagged the market over this period, thanks to weak business fundamentals, including slow revenue growth. The healthcare giant now faces additional obstacles, such as the threat of steeper tariffs due to President Donald Trump's aggressive trade policies. Even amid all that, Medtronic has plenty of redeeming qualities and could still be a solid investment for long-term investors. Here are three reasons why. 1. Medtronic is spinning off its diabetes care unit Medtronic recently announced that it will be spinning off its diabetes care unit, which will become a stand-alone, publicly traded company. Although sales of diabetes products have been growing faster than the rest of Medtronic's business, they have also been a drag on margins. During the company's fiscal year 2025, which ended on April 25, diabetes care accounted for 8% of revenue but only 4% of operating profits. Medtronic's other segments are not growing their sales as quickly, but they have more profitable margins. In an environment where the company may face higher manufacturing costs due to tariffs, management has chosen to focus on higher-margin opportunities. Diabetes care was also the healthcare specialist's only consumer-facing business; the others offer products to healthcare providers. The move could help Medtronic navigate the macroeconomic landscape better if Trump's tariffs remain in place. That's especially the case if the company can find other lucrative revenue growth opportunities. 2. A significant opportunity in robotic-assisted surgery Medtronic has been developing its robotic-assisted surgery (RAS) system, Hugo, for years. It has been in use in other countries, though it's yet to get the regulatory nod in the United States. The medical device specialist decided to pursue this opportunity because the RAS market is severely underpenetrated. Intuitive Surgical's da Vinci system dominates the field and faces little competition for the range of procedures for which it's approved. Yet a couple of years ago, Medtronic pointed out that of all the procedures that could be performed robotically, fewer than 5% were. And over the long run, the demand for these kinds of surgeries will increase along with the world's aging population, since seniors are far more likely to face health issues that call for these kinds of interventions. The good news is that Medtronic's Hugo system recently completed clinical trials in the U.S. for urologic procedures. The company has requested clearance from the U.S. Food and Drug Administration for that indication. It should be the first of many. The Hugo system could eventually become a crucial part of Medtronic's growth strategy and help improve its financial results over the long term, given the significant white space available in the industry. 3. A soon-to-be Dividend King Despite Medtronic's recent challenges, the company has continued to pay and raise its dividends. In fact, the company has raised dividends for 48 consecutive years. Most businesses don't survive nearly five decades, let alone pay dividends for that long. Medtronic's ability to do so speaks volumes about its underlying business. It's a well-established leader in its niche of the healthcare market, with significant footprint in the industry and a long and successful history of navigating this deeply regulated sector. All of those factors make Medtronic an excellent pick for income-seeking investors. It should continue rewarding shareholders with payout increases for a long time -- and in two years, it should become a Dividend King. Medtronic may not be one of the most exciting artificial intelligence (AI) leaders capturing Wall Street's attention, although the company is implementing AI across its business in ways that could pay off in the long run. Regardless, its recent moves in shedding its diabetes care segment and seeking clearance for its Hugo system, along with its consistent dividend streak, make Medtronic a reliable company to invest in for the long haul. Do the experts think Medtronic is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Medtronic make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,019% vs. just 178% for the S&P — that is beating the market by 841.12%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Prosper Junior Bakiny has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy. 3 Reasons to Buy Medtronic Stock was originally published by The Motley Fool
